Transcripts For CSPAN Agriculture Department Forecast 20130225

My grandfather was best friends with her father. At the same time, the president was someone very close with japan, obviously. But we do have the territorial issue between japan and the United States. Japan and korea, sorry. Even with those issues, the economic relationship is very strong. The people to People Exchange is very strong. The ties with japan and korea is something that cannot be severed. I think the relationship that we have which south korea is extremely important, the cooperation we can achieve between these two countries. We can try to work to resolve these issues and have a Good Relationship with three out. With korea. We are planning to dispatch the vice Prime Minister and finance minister to participate in the ceremony on the 5th of february. Thank you for a speech with so many good sound bites. Are there things you would like to have the United States say or do . Have you conveyed some wishes or perhaps something more, like actions or statements . [speaking japanese] on that issue, the Obama Administration has already made clear that article 5 of the japanu. S. Treaty applies. They have also made clear that they opposed unilateral action to undermine japans administrations. Maybe this is not just limited to the same issue, but on the issues of the sea, i think it is important that we do not tolerate peoples actions when they try to alter the status quo based on force. That is what is necessary. And on that issue, our intention is not to ask the United States to do this or that. We intend to protect our territory. If it is inherently japanese territory and we intend to continue to protect our own territory into the future. At the same time, our intention is to deal with this issue in a reserve the matter. Youll be doing so in the future. We think that this issue should not be escalated and we do not agree to that kind of approach. I know that they have a press conference later, so i am trying to look for nonjapanese questions. Over there in the back. A senior associate with the defense department. Thank you for sharing your reassuring message about japans intention to return to the world stage and claim greater international responsibility. You mentioned you and president obama agreed that the north korean threat requires a chapter 7 resolution. What is your expectation of chinas role, and do you think china has played an enabling role in the missile and Nuclear Program . [speaking japanese] i believe that china is a country with the biggest amount of influence over north korea. And i think implementing sanctions, we need the cooperation of china. And also in our efforts to adopt chapter 7 sanctions resolution in the un security council, since china is a permanent member of the council, we need cooperation from them as well. And when we look at the recent missile launcher and the nuclear test by north korea, we look to these, not as simple events, but in combination. They have increased the range of their missile immensely and they have not attained the ability to reach even mainland United States. And they themselves have said that they have made their Nuclear Bombs smaller, and they have delivered on a missile. At the same time, i believe they are working and moving towards obtaining those kinds of technologies. This is why i think the United States is pressuring china to exert more influence over north korea. I think the important thing is for the entire International Community to work on china towards that end. Japan is back. It has a strong leader and america is your partner. Would you share with me your applause . [applause] everybody please stay seated because we need to let the Prime Minister get out. It is a security thing. The escorts will take him out. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2012] next, agriculture secretary Tom Wilson Tom douthat discusses some of the problems in the agriculture industry. Then, business and government leaders discuss methods to encourage hiring the disabled. We will have more from the National Governors association tomorrow as they close their winter meeting with a conversation with dr. Oz on healthy eating. That is live on cspan two. We know Foreign Countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid. Our financial institutions. Our air Traffic Control systems. We cannot look back, it years from now, and wonder why we did nothing in the face of real threats to our security and economy. Interestingly, one of the concerns we hear and you see it reflected, polity and timeliness. Great, you have shared information with us about stuff that happened three months ago. What about now . One reason we are trying to increase our timeliness so that we are out ahead of the issues. We are making progress. I think that we are over the last year particular, we have really improved our ability to share formation faster with the private sector. Concerns from different sectors about ensuring that the other sectors they rely on are also increasing their cybersecurity. If you are a bank, you are reliant on power and water in transportation to conduct your business. What i frequently hear is that all the Companies Want to make sure that all of the Critical Infrastructure or span moving together to increase their cybersecurity because everything is so interdependent. The new cybersecurity executive order, monday night on the communicators. On thursday, the u. S. Apartment of agriculture hosted its annual agricultural look for them. The agricultural secretary discussed risks to the agricultural industry, including the upcoming budget cuts and Climate Change. Former us senator tom daschle spoke about the challenges of Food Security and Agricultural Development. Good morning, everyone. Good morning. Good morning, everyone. I hear some response. I am asking everyone to settle in for a great morning, now. Hi there, i am debbie terry secretary kathleen deputy secretary kathleen and want to welcome you to the outlook form agricultural look for him. Agricultural Outlook Forum. Silence those cell phones, please. On behalf of the secretary and usda, a chief economist, i really want to welcome you here to arlington, virginia, especially our International Guests and all of those watching the for him via live webcast. We have several representatives from foreign embassies and we welcome you, thank you so much, we are honored to have you with us. Organizing this conference, 2000 people, 25 sessions, it is really quite a lot of work. I want to begin by thanking the organizers of the conference for all they have done. I work with a Top Flight Team in the office of the chief economist and i want to thank our chief economist and the world Board Chairman for all the great work they have done. They planned to do very full days. I know we will learn a lot. Along with the traditional commodity and food price outlook, this year the program emphasizes agriculture must manage risk. From finances to Natural Resources to transportation. One of the things i am really excited about in this program this year is more time spent on fruit and vegetables, which i think are increasing importance in american agriculture and diet. We are seeing them more center stage and i think that is a terrific thing. Also, i am really excited to be here because we have senator tom daschle as our great speaker this morning. I do not know how many of you survived many congressional hearings like i do, i sit there and look very intent, but i have my fingernails in my thumb to keep myself awake. That is the truth. I had the glorious assignment when i worked in the Senate Agriculture committee, i was the person who chaired the subcommittee on ag research, that tom daschle chaired. I have never been to such exciting committee hearings. He would pull everyone on the panel and get them in a back and forth, engaged discussion, with very pointed questions, so that we pulled out really Important Information about what we needed to do in the research enterprise. I learned so much from this man that it is just an honor to be here on stage with him. And of course, we are at the beginning of the second term for president obama. Our great leader, tom vilsack, has an opportunity to share his visions for the second term. It does seem like it is sequester, sequester, sequester these days, and that does weigh heavily on our shoulders. We are plowing through and going to do great things in the second term. I am sure he is excited to share that with you. I also want to recognize that we have a lot of young people in the audience from the Outlook Forum Student Diversity program, now in its seventh year. 20 undergraduates, and for the first time, 10 graduate students, are here to gain insights into food and agriculture. So be sure to seek them out during the breaks. If you see them in the sessions, congratulate them for being here. Mentor them a little over the course of a couple days. That would be great. I know how important these young people are, because i have an alumnus of this program, johnnie jones, who works in my office. These are the people who are going to lead american agriculture in the future. Many thanks to our partner, the university of maryland, eastern shore, and the sponsors who make this possible, including the usda Natural Resources conservation service. Students, can i ask you to stand, please . There we go. Thank you. Congratulations. Without further ado, i am going to ask our chief economist to kick off this conference, with the traditional presentation on his economic and Foreign Trade outlook. Joe has been our chief economist for 15 years. He was the deputy chief economist for 15 years before becoming the current chief economist. I know he is someone you rely upon, his analysis, for all the work you do, and is someone who has the trust of the secretary completely. So let us know what is going on. [applause] thanks very much, and thanks for enhancing that resume and letting me be chief economist for 15 years. It was good. I want to welcome everyone, and am delighted to see such a large crowd. We have had really great crowds the last few years. I think it is a tribute to jerry and the program committee, putting together such good programs. In my comments today, i am going to talk a little about the historic drought that affected agriculture this year. Despite the drought, i think the ag economy is very strong. Farm income, near record highs. A record high for 2012, and for 2013, projected cash income close to record highs. Low debttoasset ratio. Assets at record highs. However, i think the aggregate measures belies some sharp differences between sectors. Despite the adverse weather, producers have fared well, with high prices and record Crop Insurance indemnities, which helped offset the losses we saw this year. If you are an uninsured or underinsured farmer, crop losses are hitting those producers a little more than those who have insurance. And if you are a livestock, dairy, and poultry producer, this is the third year since 2007 when we have seen record high prices, with the effects that has on higher feed costs, tight margins. And we have seen, particularly on the cattle side, some liquidation. 2013, we were expecting a rebound in yields. We should see record production of soybeans. That means lower prices and improved profitability toward the end of the year for livestock, dairy, and poultry producers. If you think i am just taking the 2012 outlook and rereading it, it does look similar. We came in with low stocks this year. We were expecting record crops. We know what happened. There is a lot of uncertainty in these markets, one of the reasons we wanted to focus on risk in this outlook conference. As i go through the charts, i will focus on some of these aspects. First, let us go for the next for picture. Exports, as i said, are forecast at a record 142 billion for fiscal year 2013. The first three months of this year, 43 billion in exports. That is what we were exporting annually in the early 1990s. Imo 112. 5 billion, to mean assay trade balance almost 30 billion, at 29. 5 billion. For the second year in a row, china is our major export destination. Since 2005, exports to china have been growing by 25 annually. No surprise, it is dominated by soybeans and cotton. They have accounted, in recent years, as much as 3 4 of trade to china. If you look at the minor, but still large other exports, for things like coarse grains, corn, feeds and funders, distiller dried grains, or red meats, those are showing impressive growth figures as well. In terms of overall exports, values are up for most of the commodity categories. These are exports on a fiscal year basis. You can see that up for most of these categories, with the exception being corn. These are pricedriven events. We see volumes up for some categories. For most of the individual commodity categories, we are seeing lower volume. The drought is having some effect. For most commodities, that is being offset by higher prices, whose values are up. The big difference, obviously, is corn. It is striking that we are down 38 . On a fiscal year basis, what that has meant is, we are currently forecasting our corn exports at the lowest level since the early 1970s. I think 1971. A dramatic increase in corn exports, such that, if you look at where we are relative to the rest of the world, corn, as many of you know, for many years, the u. S. Was and have historically been the number one exporter of corn. Years ago, we had 80 of that market. That has declined in recent years, particularly since 2007, 2007, as we have seen an increase in corn used for ethanol production. Particularly, with the drought, lowest since the early 1970s. Because of increased growth of production and southern hemispheres and brazil in particular, we are likely to be the number two exporter, at least on a fiscal year basis. We would like to see crops rebound this year. But because of unusual circumstances this year, a record crop in brazil, and a poor crop here in the u. S. , we will likely see brazil being the number one exporter, at least for fiscal 2013. Let us turn to the commodity Balance Sheets. There is no question, much like last year, we are coming in with very low stocks, globally, for most commodities. If you look at wheat, because of problems in the black sea region and southern europe, Wheat Production was down this year. We know that corn, the last few years, very low stock levels. Our projected carried out for the current crop year if you look at it globally, we are at the lowest stocks used ratio since 19731974. That is just to say it has been an unusual year, the last couple of years for corn. It has been drawn down by poor weather in the states last year. Particularly because of the drought this year. Soybeans, low stocks. We have had problems with the u. S. Soybean crop because of the drought. Brazil still looks good, but drought in argentina has a lot of analysts looking at those numbers. The one exception here is cotton. Cotton, in terms of stocks, has increased dramatically over the last couple of years. What that is being driven by, largely, is china. China, because of policies to support producers, have been acquiring a lot of grain. Excuse me a lot of cotton. You can see that cotton stocks have been increased substantially in china. They currently account for over 50 of total world inventories. On a commodity basis, stocks as percent of use in china is some 120 . A lot of analysts wonder how sustainable that is. China is a large importer of cotton for its textile mills. Certainly, with this sort of stock level overhanging the market, i think this will lead to some uncertainty in the cotton market, as we move forward into this year. Let us turn to planning plantings. Obviously, we are expecting to continue strong plantings, certainly for grains and oil seeds. Some new land is coming out of crp. This shows the amount of acres that came out of crp this past fall. Around 2. 5 million acres, most of that in northern plains. You can see by the coloration of the charts, a lot of the area is coming out of some of the dakotas, where a lot of that area first went in, in the mid 1980s. This has been historically wheatland. Over the past 10 years, a lot of corn and soybeans creeping up in those areas. Turning to the planted acres, last year, i think the combined acreage for corn, wheat, and soybeans was some 240 million acres. Excuse me 230 million acres. Certainly, we have seen some of the largest corn planting since the 1930s. We expect this year for corn to be very strong again. Because of strong prices, many were able to get in corn. Perfect planning conditions. Of course, the world turned ugly in june, as the rain stopped in a lot of key states. This year, we expect planning to be very strong. It favors soybeans a little bit more than it did a few months ago. As we move toward march, when we put out are planning numbers at the end of march, this is something certainly to look at. We should see some decline in cotton. That is no surprise. We have seen surveys which suggest that. About yield, this is where most analysts are directing their attentions. If you look at the drought monitor, and they are saying few of you have not looked at the drought monitor, if you follow these markets closely, we still have significant drought in the central plains. The good news is, if you were to look at this map six months ago, we would have seen significant drought in illinois, indiana, and western kentucky. That has improved a lot. The forecast suggests some improvement. More improvement creeping into the western corn belt. The plains still look like they have a persistent dryness. That has an impact on the winter crop. In kansas, oklahoma, and nebraska, currently about 50 of that area, doing a weighted average, looking at state crop conditions reports 50 of that is in poor or very poor condition. Spring rains are going to be very critical to see how that crop improves. Otherwise, i think we could be facing some serious abandonment issues for the winter crops. Rain is obviously critical. What about for the other crops . What we are looking at, at least in our analysis, is a return to trend yields. I think tomorrows commodity sessions will have a paper on our yield models, and how we incorporate weather in those yield models. I think both of these would result in having record crops for corn and soybeans this year. Dramatic improvement, particularly for corn. Last year, we lost four billion bushels. We are expecting to rebound on that amount this year. One area where there is concern, and we are participatinganticipating higher abandonment for the hard red winter area. The soft red portion looks to be better. Hopefully, there would be some rebound there, in terms of yields. I think we have seen some improvement. Just four or five months ago, as a percent of total production and drought, we have seen 5 or 10 improvement in the last couple of months. If you look at the data, there is little correlation between rainfall in one year and in the next year. Studies have shown that. Going into this year, i do not think there is reason to think necessarily that we are going to be looking at a poorer crop. There are questions about yield drag because of low subsoil moisture. Tomorrow, we will go through that in more detail. I will show you a wonkish economist thing here. I looked at preseason moisture in iowa. I looked at projected yields in iowa, trend yields relative to what we just saw later that year. There is very little direct correlation. Some of the yields on that part of the graph are years you remember. 1998 was a low subsoil year. Last year was down a little bit. You also see years we have low subsoil levels. We had record, far above trend. The last thing i want is a clip saying no relationship between drought and yields. Obviously, there is a relationship. It is just to say we will be following this carefully. At least at this point in time, there is no reason to think we will not be looking at normal yields. Again, the proof will be obviously, as we look into spring. As we all know, for corn, the critical month is july, as it always is, in terms of precipitation and temperature. From 2006 through 2012, we saw corn used for ethanol increase by almost 700 million bushels annually. It topped bushels in corn use for 2010, 2011, 2012. What this chart shows our weekly ethanol production numbers from Energy Information administration. I have analyzed them, so you get a feel for what they look like, and for an entire year. Meeting for the renewable fuel standard, i can see from mid summer, most weekly numbers annualized have been below the caps. We have reduced our annual corn use for ethanol numbers by 10 last year. While we expect with a record crop that that will rebound a bit, we are still calling for, as we look forward to 2013, 2014 we are still calling for about 4. 67 5 billion bushes of corn going into ethanol use. The problems are actually on the demand side. Use of ethanol for gasoline gasoline consumption was close to 40 billion bushels for 2011 2013. For penetration, and that gives you 15 billion bushels. Instead of that, however, we have seen, because of high prices, gasoline prices, the recession, and Energy Efficiencies or fuel efficiencies increased fuel efficiencies gasoline consumption has declined. That green line is what the Energy Information administration was rejecting from ethanol for gasoline use in 2008. In the out years, improved fuel efficiencies and a lot of other assumptions. Some decline. The most important thing is what is going on over the next three or four years. With some decreases. I think this is a very important piece of the puzzle, at least the outlook puzzle that we have seen. Particularly compared to where we were in 2007, when we were talking about yearoveryear increases, this is at least, for the next few years, flattening out corn use for ethanol, and will be an important factor in that market. Let me get to the crisis and move over to incomes, and start wrapping up. We should see some significant fall on prices with these record crops. This is not unlike what i was saying last year, and with these sorts of things. He are projecting corn prices, season average prices, below 5 a big drop from where we are. We prices to come down as well. Soybeans down. Some improvement for rice and cotton. Domestic Balance Sheets should tighten up a bit. That is obviously going to improve feed margins. Declining feed ratios do not necessarily mean problems. I think there is no question, since 2007, with the three big try spikes, we know there have been problems at various times with the livestock, dairy, and poultry sectors. Certainly, we have seen tight margins. These are all very high prices for, i think, meat and poultry and dairy markets. What i think will be the real benefit to this sector will be lower prices on the feed side at the end of the year. Hopefully, i think the critical thing, with the problems the cattle sector had we lost 3. 4 million head over the last four years in kansas, oklahoma, and texas alone. The rest of the nation was pretty constant, losses and gains offsetting. In the southern plains, the drought in texas two years ago and this past year, has affected cattle. We know that 60 of the pastor in this country, over pasture in this country over the summertime, was in drought. We could unfortunately see further liquidation. What this means for food prices we will see some transmission of these higher prices, higher livestock prices, in particular into higher food prices. Currently rejecting food inflation to increase by 3 or 4 . There is a session on that later today. If you look at the most recent month, december in fact, a report came out today, which i do not have the numbers for. Our current levels of inflation, very low. 3. 4 , yearoveryear, for the most recent month. Ers is forecasting 3 to 4 for 2013. High, but not nearly as high as what we saw in 2008, or what we saw in 2011. As i mentioned at the outset, ers numbers on net cash income, net farm income net cash income down a bit this year, at 323. 5 billion. We recorded a record in 2012. Record receipts the last couple of years just phenomenal. A doubling of receipts over the last 10 or 12 years. We have also seen high expenses. Some of that has been feed. Feed is a critical component for the livestock markets. Looking at net cash incomes, ers looks at farm businesses. These are sort of average farm and business data that ers. Of their survey. For livestock, another year where we have seen some decline. We have seen very back, not quite as low as what we saw in 2009. The real story on the livestock issues, i think, is, can we get through the next few months, particularly on the pasture issues and other things, to get into late summer, early fall, where we should start seeing feed prices come down that would help profitability return to the sector . Let me wrap up. Let me say this sounds like deaa vu, one of those dejas. You have heard this before. Admittedly, very similar to our forecast last year. I think, obviously, the big issue the critical factor that people will be following, is the weather. With drought in the nation continuing and a lot of the country, there will be a lot of people concerned about the weather. There will be a lot of people watching it carefully. At least Empirical Data suggests a return to more normal yields as we move into spring, which should help moderate prices and improve profitability for these sectors. [applause] let me introduce my boss. [applause] conclude. Hat i will thank you. [applause] introduce my boss. Many of you know his story. If not, here it is. He started as a lawyer in iowa, helping small towns through the farm crisis in the 1970. Tragedy hit in his small town, and he became mayor. Fast forward. He became a twoterm governor in the great state of iowa. A candidate for president of the United States. And then our secretary of agriculture. He has been giving some tough love talks across the country. Tough in that he has pointed out some issues we need to grapple with, in terms of political relevance, and how we make sure that people inside the beltway and across our great country understand the importance of what goes on in Rural America. I say tough love, because he does so with passion. He does so with finding ways to entice young people to careers in american agriculture. He is the hardest working secretary of agriculture we ever had. Ladies and gentlemen, welcome him to the stage. Thank you for your leadership on a number of issues. This is become an integral part of not just this conference, but agriculture and opportunity in Rural America. Her work has really made a difference in this direct to consumer sales opportunity, which is now a multibillion dollar heart of agriculture. It is amazing. Every year, we come here. Every year, you give the same damn speech. [laughter] but it could be worse, right . I particularly want to thank senator dashiell for spending a few minutes with it today. Folks in washington, d. C. , and around the country we are really pleased to have you. Everywhere i walk, i see these big posters. We are seeing expanding exports, and an expansion beyond biofuels. We are making more chemicals, fabrics, and fibers. We have the local and regional food system expansions. We see record farm income, record conservation, even more excitement from young people about agriculture. The other day, i was in iowa. A young lady came up to me and said she wanted to thank usda for the work it has been doing recently. I appreciate that. I assumed she was going to talk about record farm income or record exports. What she wanted to thank us for was that in the 1980s, when she went to school, and majored in agriculture and got her advanced degree, she said she was a bit humbled, and sort of embarrassed, when she would tell her friends and family what she was doing. But because of what has been happening in agriculture today, because of the activities of usda and the folks in this room, she said agriculture is cool again. People are excited about future careers in agriculture. Things seem to be going in the right direction. I began to make the list of all the things we should be concerned about. What dawned on me is, normally, when you talk about agriculture, you talk about the weather, these you may not have control over. The risks, in many cases today, are manmade. Let me give you a few examples. There is risk in the uncertainty, with reference to budgets and the impending sequester, to agriculture. You all know that march 1 will come. If it comes before congress has acted, the sequester will be triggered. What that will mean for usda is, virtually every line item of our budget will be reduced by a certain percentage. That percentage could be somewhere in the neighborhood of 5 to 6 . That is an annual percentage. That means we have to implement this reduction in the remaining portion of the fiscal year, which will be approximately six months. That means it is really the impact of a 10 to 12 reduction of our remaining resources. Unlike normal circumstances, where congress will ask you to reduce funding, but give you flexibility to choose where and how, this is a direct prescription from congress to reduce every line item by the same percentage. If you are fortunate to be in an agency or part of the department that has flexibility, good. In food safety, you have very few lines, and most involve people in labor. You have very little recourse. That is a risk that we now face. Because the only way we can absorb the cut of this magnitude is by impacting the people who work in the food safety area of usda. And we all know that when we do that, it does not just impact those workers. It impacts all the processing facilities and plants and production facilities across the country. There is a way to resolve this. Congress can give you flexibility, and say we did not mean every line item across the board, with no flexibility, in six months. Or they can come up with a larger deficit reduction package that would avoid sequester. But if they fail to act, then we are required by law to invoke the sequester. If we spend money we do not have, there are civil and possibly criminal penalties associated with that. We take our job very seriously at usda. It is something we do not want to do. It may be something we have to do. This is a risk that is manmade. The same thing is true on march 27. March 27 cons if congress has not continued the budget process, and provided a continuation of the continuing resolution, or passed a budget. Theoretically, all government activity stops. That, of course, would impact our trade promotion efforts, food safety, our ability to provide credit to farmers right at the time they had to finalize the Credit Opportunities to put their crop in the ground. This is another risk that is manmade and could be avoided. There is a risk associated with not having a fiveyear farm bill. We know the Senate Passed a farm bill last year. We know the House Agricultural Committee passed a farm bill last year. But it did not get done. That now creates uncertainty as to what the safety net will be for farmers who are faced with the drought or the conditions that joe just talked about, who are, through no fault of theirs, facing economic disaster. Because we do not have a farm bill, as livestock producers that were hurt so badly in 2012, were not afforded the possibility to have the kind of Disaster Assistance that was in effect the year before. They now face a financial risk that is manmade. We need a farm bill. I like to refer to it as a food, farm, and jobs bill. We need to have certainty about what the safety net should be for our farm families. After all, they provide this country with some extraordinary security. We are a nation that can feed itself. Make no mistake about this this is not something to be taken for granted. Many, many countries around the world cannot say that. It makes us a stronger and more secure nation, brought to us by american farmers, ranchers, and producers. They need a safety net. If we are to build this rural economy, and create Economic Opportunity for young people raising families in a small community, we have to increase our commitment to a bio economy, where everything we grow can be used to produce virtually everything we need in our economy. It is how you strengthen and build a middle class and Rural America. Get back to the business of making, creating, and innovating. You cannot continue to see the expansion of local and regional food systems, and the opportunities in rural areas, unless you have a fiveyear program. You certainly cannot resolve significant trade disputes, including the one we have had with brazil over cotton, which could potentially jeopardize us in this country with the application of serious penalties, without a fiveyear food, farm, and jobs bill. Those are risks in todays agricultural world that can be resolved by congress doing its job and getting a bill passed. Then, there is the uncertainty of labor, another manmade issue. Agriculture relies, to a great extent, on immigrant labor. Everybody in this room understands and appreciates that a good deal of that labor is not necessarily in this country legally. And that has been the case for a long time. This is a risk to agriculture, and we are beginning to see the implications of that risk, because we have had crops grown last year that could not be harvested, or cause there simply were not enough hands to pick them. It is important and necessary that we have immigration reform, that we create a system in this country that understands and appreciates the importance of immigrant labor, and respects it. That creates a comprehensive set of reforms. That secures our border. That creates responsibilities on those who are here illegally, to pay a fine, to pay back taxes, to learn the language, and then creates an opportunity for these folks to be here legitimately, so they can provide the labor and work that is necessary for our producers, so we in this country can continue to enjoy the extraordinary diversity of agriculture that we have. And that we can continue to afford the luxury of having some of the least expensive food in the world. Despite joes report about food inflation, 3 and 4 , that is more of a normal rate of inflation. We still enjoy the fact that less than 10 of our paychecks are spent on food. Go to most other developed or developing nations, you are going to pay 15 , 50 of your paycheck for food. Not only does the system here create this enormous diversity, and this great Food Security we enjoy, but it comes to us at an affordable price. But there is a risk, if we do not have comprehensive immigration reform. It is a manmade risk that can be resolved. Then, the uncertainty of trade barriers, created by other nations. Right now, we are dealing with a decision made by russia to impose a ban as a result of the use here of a chemical. It is not scientifically based, and is contrary to international law. The trade office and our office have stated clearly it is our expectation that russia will reverse that decision. That is another risk to the livestock industry that is man made. Fortunately, we got some good news yesterday, as a Scientific Commission from oie, has indicated that the u. S. Can now be considered a low risk nation for bse. That will further be confirmed this summer. We got further good news with opening of markets, be considered a low risk particularly for our beef. Last month, we talked about the opportunity japan is now finding for a wider market in japan, which is good news. We have seen korea, and the opportunity that presents. We have seen mexico reduce its restrictions. Hong kong will join that list, by taking boned beef products of any age, and bonein beef of less than 30 months. But these barriers still exist. Which is why it is necessary when you have the resources and ability and personnel to continue to advocate for for ou. American farmers and ranchers all over the world. As these barriers are constructed, we have to tear them down. Those are all risks that we face in agriculture today, that are all manmade. These are resolved by congress and the International Community, following science and rules. There are, however, risks we cannot control. Joe talked about the drought. Following the consequences of the drought last year, the president directed us to create a drought task force, made up of all federal agencies, to try to mitigate the impacts and effects of drought. That led us to begin thinking at usda about steps we can take to help producers during a difficult time. We took a series of steps to try to mitigate the consequences. We opened up crp land, and changed premium payments, things of that nation that nature. It also got us thinking were there other steps, other things we should be doing, to provide help and assistance . It occurred to us perhaps we should be focused more acutely on the need to encourage multi cropping through the United States, in order for us to do a better job of conservation, to create biomass that could be a revenue source, and to potentially allow us to conserve precious water resources, which would in turn allow us to get through these drought circumstances in a more favorable circumstance. We have begun a process of looking at ways in which we could provide assistance. You will be fortunate to hear from a fellow by the name of david brant, who has a no till nutrient Management System he has put in place since the 1970s, that involves multi cropping. It saves about 100 an acre on nitrogen. It has increased its corn yield seven to 10 bushels an acre. That is something that ought to get everyones attention. At usda, we ought to be looking at ways we could reduce the manmade barriers to multi cropping, so that that could be another strategy for managing risk, recognizing there are different types of multi cropping, whether it is double crops, or an integrated livestock arrangement, or for a street. We will spend time better looking at Crop Insurance programs that discourage multi cropping, looking at the effect on the yield of primary crops, and the supply chain and delivery system, so we can encourage more of this activity. We will use our grant money to provide some financial assistance. We intend to develop an atlas that will provide producers a lot of information about what currently is working in multi cropping arrangements around the country. There are great examples. We will provide information on the steps to reduce those barriers that we have created within usda. And we hope that we will do a better job of improving our communication about the conservation benefits that will come from multicropping, and give us yet another tool to deal with a changing agriculture, and managing the risk of weather. As we started thinking about multicropping, it occurred to us we have a diverse agriculture in this country. There are different Production Systems that people want to use. Some folks might want to use ge technology. Some might want to go a conventional way. Some people might want to be organic reducers. It is important for us to recognize and to respect all production processes, and to make sure everybody has the opportunity to choose the type of operation that is best for their family and themselves. That is why we put together a group of folks, and we challenge them to think about how we could create a system and support in this country, were different production processes could coexist in the same geographic area, recognizing that this is a tough question, and that there are passions on all sides of this issue. We put 22 people in a room for about a year and a half. They have great leadership from russell redding. These folks worked really hard to come to a set of recommendations and conclusions. They basically modeled what we ought to be doing in this town more frequently, which is coming together and figuring out where the Common Ground is, where the moderate middle is. They came up with a series of recommendations through what we call the ac 21 committee. We are posting on our website the next steps in that process, so we can tell those 22 folks who worked hard that we are following their recommendations. We cant help producers of all types that there are ways we can provide help and reduce the risks that may be associated with different production processes trying to live in the same space. You are going to engage in research and look at ways in which we can create measures to strengthen this notion of coexistence. We need to know how often there may be circumstances where crops are compromised as a result of activities in other areas. We are going to do case studies, and will better understand from those case studies exactly what the challenges and barriers are to this notion of coexistence. We hope to be able to develop best practices, to be able to provide information, so as folks are looking at coexistence plans or stewardship efforts, they will know precisely what works best. We are going to create a competitive grant. That grant will basically fund a conference that will be held this year. We will bring experts in to discuss information about gene flow, so we have a better understanding of precisely what happens, and can mitigate the risk that could be damaging to someone elses crop. We will continue to look at ways in which we can indemnify or compensate those who may have suffered an economic loss. We are going to have nas review its data to have a better idea of how to price organic crops. There is a premium associated. They are, in a sense, a different commodity. Some of the normal practices, normal surveying techniques, may not work quite as well for organics as they do for conventional agriculture. That will give us enough information to do a better job in terms of how to set up insurance policies and programs for these organic crops. And we will focus on seed quality. This spring, we will launch for the first time the National Genetic advisory council. We will be tasking that counsel with looking at how we can evaluate the availability of nonge seed for producers who might be working and producing in gesensitive markets. We will look at monitoring, maintaining the purity of publiclyheld germ classes, because there is concern about that. As will mitigate the risk associated when folks want to do things a little bit differently, in the same general space. It is part of managing risk. The longterm risk we will face, with a changing climate i will conclude with this. There is no question that the climate is changing. We recently furnished to assessments from usda on the impact of changing climates on agriculture and forestry. The conclusions were pretty obvious. Higher temperatures lead to more intense weather patterns. More intense weather patterns lead to greater stress for crops and livestock. And increase tree mortality. We at usda have a responsibility to figure out ways in which we can mitigate the risks of something we really cannot control. When it happens, we cannot control when a drought occurs. We cannot control when a horrible tornado hits, or when flooding occurs. But we can take steps to mitigate the impacts and effects of that. Here is what we have done, and here is what we are going to do. We released this year the first usda Climate Change adaptation plan, and we are outlining practical steps that can be taken right now to reduce this risk. We are expanding forecasting, so we have that her models to give people a better sense of what happens with intense weather patterns, which are a risk we need to control. We are going to win sent and increase our in soil health management, creating systems for farmers and ranchers they might be interested in. We are going to have rma work with his partners to create a web portal that will provide information on climate and weather. In turn, we will have enhanced ability to adjust losses more quickly and accurately. We have challenged the Forest Service to begin incorporating Practical Applications for mitigation and adaptation strategies for our planning and Management System work. The next steps require developing a roadmap. We want to provide practical advice to our farmers and ranchers, in ways in which they can reduce risk through the use of their property. We want to provide better support materials, so that they can create techniques and technologies that will allow them to mitigate the impact. We saw this with the drought. It is amazing. Despite the drought, we still had a relatively large corn crop, even the extent and severity of the drought last year. The reason is the technology and the techniques our farmers used. We need to better support Climate Change research. We need to make sure we have resources going into this research, so we can provide you with the information that allows you to manage this risk. We need to improve our outreach and extension, so the outreach we have, and our ability to provide help and assistance, is disseminated more widely. And we will be able to do this by organizing this effort, perhaps, around regional hubs, where we will recognize the differences of climates and the differences that climate has on various crops that are grown in different parts of the United States. Rural america, as a result of most of the farming and ranching and production that takes place is the number one place for Food Production in this country. It is the number one place for most of the water that is consumed anywhere. It is the number one production of energy of any source. It is the source of as they say in every speech, of a disproportionately number of those who serve us in the military. Those who work hard in this place require us to do everything we can to allow them to help make us a more secure and stronger nation. Promize and we can have a five year farm program to provide a strong safety net and have the kind of activities that will encourage greater Economic Growth. And we can have the farm issue with a we will everything we can to make this happen that we need you to be engaged in this process. We need you engaged in this process and encourage those in congress to help us to help you. We want to continue to make agriculture cool. Agriculture is the answer to the moral dilemma of our times. How do we feed our populations as resources become scarce . We need to mitigate the impacts of Climate Change. We need a new it will help spur an American Economy that is focused on innovating and growing and manufacturing and exporting. That is why this is important. The longterm security and safety of this nation is absolutely dependent on managing these risks we have identified today. It is that important for this country. You all can help. One man who understands this better than most is tom daschle. I can say a lot of things about tom daschle. I can talk about his military career in the air force. I can talk about his service in the house of representatives and his extraordinary leadership in the senate. The only person to serve as a majority and minority leader. I have said a lot about this man in terms of what his counterparts thought of him. I prefer to talk about tom daschle the father and grandfather. I think you can tell the measure of a man or a woman by the children. Tom has got three great kids. I had the pleasure of knowing all of them. His daughter is an Award Winning journalist. His son nathan is a social entrepreneur. His daughter lindsay, my favorite he cannot say that works at usda. She did an extraordinary job of helping to lead a first ever effort called the Rural Council when president obama established a council of all federal agencies that is involved in Rural America. Lindsay basically led that effort. She left usda because she had a call to help kids in trouble. She is pursuing work in social work. Three great kids, four great grandchildren. That says a lot about tom daschle. He will share with you today his insights. I saw him the other day at a lunch in a restaurant in washington, d. C. What impressed me the most was that virtually no one entered that restaurant without stopping at his table. We are fortunate to have them here today. Ladies and gentlemen, tom daschle. [applause] thank you. It is so nice to be with all of you and be here this morning. Only at a conference can you hear four speakers by 9 a. M. Tom gave an eloquent and powerful analysis of the risks we face in agriculture, manmade and natural. It is a reminder yet again of the extraordinary leadership that we have in our agriculture today. I consider him a very dear friend. An unparalleled public servant. Someone that i admire for so many reasons, but in particular because of his mentorship in particular because of his mentorship of that young daughter of mine, lindsay. So i thank him, for all that he does, not only to my family but for all of us each and every day. I also want to thank them for their thoughtful presentations today. I do not know about you, but i have learned a great deal just in the first hour of this conference. And we have a lot more to go. Talk about dedicated public servants, leaders who served with selfless determination, you have three of them right here at this table. I am honored and flattered to be part of the program this morning. [applause] being here, i am reminded of an open door meeting i had in a rural part of south dakota several years ago. As a lot of you know, in our small towns we do not have a lot of choice when it comes to where we meet. It is often times in the local buffet bar. I used to hold these public meetings, as i know thomas has done through iowa for many years. On this particular meeting i was about to start when a farmer interrupted me as i was about to begin. He said, i have a question. He had obviously been at the bar most of the day. I could tell that just by the way he started his question. Tell me, what is the real difference between a democrat and a republican . I was a little impatient by the question. I just said sir, when you are sober i will give you an answer to that question. He said, when i am sober i dont give a damn. [laughter] the truth is that we should not care. Agriculture is not democratic or republican. Not partisan at all. Rather than divide us, it should unite us. As i look over this tremendous crowd i see unity among all of you. In south dakota we have a special term to describe agricultural issues. We just call them issues. I was very fortunate to spend 30 years on these issues in congress. Attempting to put Rural America s agenda on the national agenda. Almost every day i will since i left the said im reminded that agricultural issues, Food Security issues, do not stop just as tom said just now, at the prairies average. These are nationals issues. Their global issues. Today, farming and Food Security are beginning to receive the attention they deserve. President obama has launched a new alliance for Food Security and nutrition with the goal of raising 50 million subsaharan africans out of poverty over the next decade alone. City kids are going back to work on their grandparents ranches. Farmers are having their own Online Dating service. The most talked about super bowl commercial courtesy of the late paul harvey, it was dodge rams heartwarming tribute to the american farmer. What is that Kenny Chesney song . She thinks my tractors sexy . There is some truth to that. Agricultural issues are, i would argue, sexy. If not sexy, increasingly critical and increasingly important. I am glad to be here, and it is metaphorically appropriate we are here today. It turns out it was february 21 of 1865, 148 years ago today, that the Us Patent Office issued patent number 46,454. I will not give you a pop quiz. It was simply labeled john deere plow. But the implement sketched out on the page could just as easily have been labeled, as some historians have named it, one of the most important inventions in american history. They called it the plow that broke the plains, and it did. By replacing cast iron with smooth steel, john deeres innovation opened up huge new swaths of land for cultivation. It made it possible for towns like aberdeen, south dakota, my hometown, to exist. Before it, killing an acre took a grown man a full 24 hours. After, it took as little as five. Every pile of soil over turned up and did another assumption about what the land could produce. That, to my mind, has been the story not just of agricultural success but of national success. Indeed, of global progress. This kind of Game Changing innovation has enabled us to leap ahead, to break the plains, to increase harvest, and frankly to feed the whole world. Sometimes these innovations come from the most advanced science. Other times they are simple steps and ideas that come from looking at and listening closely to the problem. But all of them can break down barriers to Food Security. Allowing us to plow entirely new paths. So today, more than ever we need those new pathways forward. Just take a look at a few recent headlines. Drought on Mississippi River impacts everything from japanese livestock to american beer. Food shortages could force world into vegetarian warns scientists. Patent endings raise new biotech issues. Global top production shows some signs of stagnating. Could Climate Change be al qaedas best friend in africa . I could list dozens more. It all turns out adds up to a perfect storm for challenges to global food reduction and as a result challenges to global food economy and quite literally Global Security. When i think about the factors that make up the perfect storm i am reminded of what mark twain reportedly observed. My land, they are not making it anymore. I wish twain was right. The truth is Global Warming is making last less. So we need to do more with the land we still have left. Every year 7 billion of us on this earth already use the equivalent of a planet and a half of resources. Yet 870 Million People worldwide still today go to bed hungry. By the year 2050 there will be over 2 billion more mouths to feed, many in the developing world. That is not sustainable. To keep up with this rapidly rising demand we will need to increase global Food Production 70 by the mid century. As assistant secretary of state jose that means producing as much food in the next 50 years as reproduced in the last 10,000. Think about that for a minute. Between now and the time my grandkids are old enough to attend usda conferences on their own, we will have had to grow as much food as we have grown from the dawn of recorded history to today. We will have to do it without more land. Compounding this problem are the effects of a changing climate, which anyone who works close to the land can plainly see. Last september the cover of National Geographic asked the question, what is up with the weather . It is a very fair question. Last year was the hottest on record in the us, with massive summer grout droughts leading secretary millsap to declare more than half of us counties primary Natural Disaster areas. We witnessed extreme flooding in asia and devastating drought in the order of africa. In europe, uncharacteristic deep freezes have given way to destructive wildfires. Un food and Agricultural Organization is warning of a huge locust infection in egypt. Talk about disasters of biblical proportions. You cannot make this stuff up. As a secretary has shared with us on many occasions, these Natural Disasters are leading the higher and higher Crop Insurance payouts at a time when the federal government is facing a brutal fiscal crunch. Well some folks may believe that warmer temperatures and more co2 may actually benefit agriculture, it does not look that way in the long run. Crop yields are down to percent globally three percent globally, and for every one degree of celsius increase in average temperature yields the crease by an average of five percent. Climate change is projected to degrade up to one five 1 5 of the air bowl land air bowl land in the developed world. Meanwhile, and this is a regrettable oversight. We are not investing enough to improve agriculture productivity. Right when a growing population and a warming climate require us to do more with less. Here at home as the secretary just said so powerfully, it is shortsighted fiscal policies leading us to slash funding for Agricultural Research and land grant universities. We are spending even less on agricultural r d in low Income Countries. As of 2000 and 2008, our investments in the developing world are less than half of what they were 30 years ago. Last in half. Less than half. Well there is evidence of increasing investment in the agricultural sector, especially from the private sector, there remains a 79 billion difference annually between what we invest in low and middle Income Countries and what they need to feed their people. This level of investment will not cut it in places like africa, where agricultural r d has declined. Even while the population is expected to triple by the end of the century. As ive said said, it is a perfect storm. Pitfalls and challenges. If you all look closely at your programs, you will see my name listed as thomas daschle. I am not here to preach doom and gloom. I am something of an optimist. I think anyone who serves three decades in political life and lives to tell about it has to be an optimist. So to my mind weathering the perfect storm is possible if only we have the wisdom and the will power to rethink our approach. What do i mean by that . I know a lot of you are very familiar with the four h these are what i consider the four ds of global engagement. Defense, diplomacy, the mocker say, development. Food security is essential to each and every one of those four. Consider the first of these factors, the state of our National Defense. Our National Security is to a large extent contingent on our Food Security. Hunger and poverty trigger political and economic instability and ultimately threaten Global Security around the globe today. If not before, this was made clear in 2007 and 2008. A changing climate contributed to rising food prices which led to riots around the world. Food and water scarcity are quickly becoming a leading cause of global instability. Agriculture uses 70 of the globes water. I think we can all agree that feeding people is a great way to use those resources, but coming together to resolve our water and food scarcity will be central, will be central to a Strong National defense. It is not just food and water security. Agriculture is agricultures overall role in our National Defense is multifaceted. Playing a Critical Role in Energy Security as well. Just last week secretary bill sack vilsack highlighted the importance of biofuel in energy independence. As you all know, former secretary of defense leon panetta was a vocal advocate for diversifying our militarys energy resources. From biofuel drones to a green fleet, i expect similar policies to continue when my former colleague chuck hagel is confirmed, hopefully as early as next week. For all these reasons, i have long been a supporter of renewable fuels. I encourage the further development of an industry that is important both to our National Security and to our farm economy. Whether we are talking food or water or Energy Security, let me put it this way. In the future more crops in the field can mean fewer soldiers in the field. At the same time, as important as our defense capabilities are we also need to rebalance toward. He other three ds the us today spends more on defense than diplomacy, democracy, and development all put together. Meanwhile in the past year china has more than doubled its investment in developing new agricultural technologies. Those are the kinds of farsighted policies enabling china to emerge as a world power. Which we, frankly, need to get back to. As we shift our focus and resources toward smarter, more constructive forms of International Interaction it is critical that Food Security remain at the center for shaping this secure world. When it comes to diplomacy that means forging Stronger Public private and government government relationships. Like usaids feed the future initiative. Initiatives like that our countryled and focus on local solutions to enable countries to take ownership of their own development. It also means ensuring that 500 million small farm holders can participate meaningfully and democratically in governing their own countries. They feed an estimated 80 of the population of asia and sub saharan africa, yet these farmers often have no voice in the future. More specifically, it means empowering women who represent 43 of Small Farmers and are the majority of farmers now in more than 30 countries. Land rights and ownership, for example, can help women realize their potential, which in turn benefits families, communities, and these countries themselves. Lastly, building a secure interconnected globe will take a deep commitment to that final d, development. It has only recently begun to receive the attention it deserves. This means that traditional country and governmental commitments, but also means private Sector Development that simulates stimulates entrepreneurship and empowers individuals. There is a direct connection between the countrys economic circumstances and its success in advancing the goals of the first three ds. Agriculture development is perhaps the most critical first step toward a National Economic development program. Moving from substance to surplus enables farmers to feed their families and communities, connecting to emerging markets and improving their life livelihoods and ultimately strengthening local economies. Growing economies lead to private sector investment, which only further allows for the Economic Growth and development to which we all aspire. Those rising economies translate into expanding markets for american next ports and increased production for american farms. Because this issue is so fundamental to the wellbeing of the world i would like to spend my remaining time talking about what it will take to achieve these development advances. Here is how i view the challenges and opportunities of Global Development today. Recently i came across a chart that i believe really only illustrates the global imperative to promote Agricultural Development in difficulties we face. It consists of two sidebyside pie charts, which is appropriate because the graphic is about food. One pie chart shows the distribution of arable land around the world. The other shows the distribution of the worlds population. Many of the corresponding wedges are wildly disproportionate. East asia and the pacific contain 14 of the worlds arable land but must support 31 of the globes population. Oecd countries, that ratio is reversed. The ratios are similarly unequal when it comes to the distribution of calories. Rich nations experience over nutrition and poor ones undernutrition. Connecting people the food will only become more difficult as roughly 70 of the global population migrates to the these by 2050. Cities by 2050. Further away from where food is grown. Requiring new ways to prevent waste and enhance nutrition. Here is another illustration. From all the statistics i have thrown at you so far, there is one thing that i hope you will remember from my remarks this morning. It is just breathtaking. Just to say this. A full 3050 of food produced in the world rots or goes uneaten. That, to me, is one of the most amazing statistics i will ever articulate. Up to 50 of our total global output. Well waste might be a problem here in the developed world, the problem in developing countries is getting the goods to market area roughly 85 of the food produced never crosses international borders. Given the unequal distribution of people and arable land i just mentioned, that is a major obstacle to data feeding the world. When it comes down to it, we need to produce more higher quality, more nutritious foods. And we need to become better at moving at. We need to do a lot more of it sustainable. The solution to those problems, broadly speaking, is a word that i think all four of us mentioned in various ways as we spoke this morning. That single word is innovation. Indeed, through sciencebased technologies we can innovate to handle Severe Weather conditions, diminishing resources, postharvest loss, nutritionally insufficient crops, and the benefits of science and innovation in food and agriculture in as many forms are seen each and every single day. We can connect Rural Farmers to extension workers and best practices with mobile technology, improving crop yields. We can enhance the nutritional content of crops and foods through fortification and Ingredient Solutions that reduce fat, salt, and sugar content. Modern irrigation and other Water Management practices enable farmers to more efficiently your gay crops and reduce water wastage. Irrigate crops and reduce water wastage. Farmers are using Solutions Like Gps Technology to increase yields while using further fewer inputs. Innovation is not just about science. Sometimes innovation is about creative collaboration and partnership that provides new perspectives to address the complex challenges. The global Food Security index created by the Economist Intelligence union in support of dupont is an invaluable toll that measures the core indicators that dry Food Security. Affordability, availability, quality, and safety. Across 105 countries. The index can tell us why some countries are more prone to food and Nutrition Institute during insecurity than others, enabling targeted investment and countryspecific solutions. Innovation comes in simple forms. Resulting from simply new perspectives. Melinda gates recently joked during a npr interview you may have heard about an idea one of her staff had. To use sweaty socks as an anti malaria mosquito repellent. Everyone dismissed the idea, but it turned out to be a very good one. A similar method is now being used. Feeding an Unequal World with a growing population and shrinking resources will require new ideas tom about again small , both big and small. They will be applied in new ways with new partners. Pay as much attention to innovation for photosynthesis as innovation in photosharing. We want the us to be the hub of this innovation. We will need to do much more to support Agricultural Development. For starters, we need serious, sustained publicprivate investment and research in new technologies. Despite wasting all of that food, only five percent of Agricultural Research today goes to studying post harvest loss prevention. But we cannot just invest in r d and hope the problems miraculously solve themselves. As i see it, there are three ways we can do a better job fertilizing the field, so to speak. Those three legs supporting this tribot of innovation our collaboration, education, and regulation. Lets start with collaboration. I call it silos are for grains in my speech. It is true. If we have any hope of overcoming the difficulties of distance, of drought, disease, we must reject the silo stakeholders and instead build solid, enduring partnerships for productivity. Lets leave the silos for grains. That means establishing and strengthening relationships between foundations and family farm activist. Agro business and academia. It actually means requiring that we all come together as actors at all levels, smallholder farmers literally down in the weeds to the un general assembly. This cannot be a topdown exercise, either. It means understanding the end user so that we incorporate local cultures and traditions into our efforts rather than working against them. If a local tribe thinks that nutritionally enhanced sweet potato tastes strange, they simply will not eat it. Our efforts will be wasted. Instead we should adopt the strategy of people like linda gail, who tells a great story some of you may have heard. Teaching chicken farmers in flood prone areas to become duck armors. She says she does it for one simple reason. Ducks swim. Together, these crosscultural publicprivate partnerships can invest in better seeds, better storage, and farm to farm farm to farm bridges, roads, and railways. They can invent new financing models for family farmers mutually beneficial trade agreements to expand markets. The feed the future program is one example of this collaboration. So is the alliance for a green revolution in africa, chaired by the former us secretary general kofi annan. Supported by the likes of the rockefellers and the gates foundations. It is a dynamic, africaled initiative to end poverty while safeguarding the environment. In one ugandan village, a trained dealer sold a local farmer seeds and supplies that increased his crop yield 150 . Another promising example is the africa project it brought together african government donors, the private sector, research institutions, universities, and other african organizations. It is a multimillion dollar effort to fortify soil with increased levels of vitamin a, iron, and zinc to address high rates of vitamin a deficiency across the continent. The fortification of this crop is significant because sorghum is, as most of you know, the secondmost important cereal in africa. But it has little nutritional value. It is also uniquely suited to adapt to africas climate, withstanding both drought and water logging. As a result, fortified sorghum has the potential to improve the diets of 500 Million People. In over 30 countries, they relied as a dietary staple. From University Classrooms to foreign fields and everything in between, these are the kinds of globally connected locally grounded collaborations that we will need to succeed in the coming century. A scaling up of these efforts will require significant commitment, investment, and resources from the global community. If we want to unleash our innovative spirit it will take more than collaboration. We will need some significant sustained educational efforts. I do not mean Stem Education and the like, though of course Technical Training is crucial to agro investment. I am talking about engaging skeptics and vocally advocating sound science as a solution to our Food Security challenge. We need to bridge the gap between people who produce food and the folks who consume it. There is an unfortunate global divide today between the rural world and the rest of the world. We have all seen it in our own lives. Food producers are increasingly disconnected from food consumers. In this country the secretary speaks often and eloquently about the need to bring the sides closer together. He is absolutely right. American agricultural productivity is through the roof, as the farmers ever presented would brag. A tell me about your per acre, how it is 10 times what it is in africa, and how it is because of technology and they are able to do things with their crops the grandparents never dreamed of doing. It is incredible to see. But one of the few drawbacks of our extreme productivity is one percent of the American Population feeds the other 99 . So the consumer is now far separated from the producer. He or she does not understand what it takes to get the product fresh and safe to the supermarket every day. A few years back some of you may remember this true story lays potato chips reworked their packaging to include a image of a potato being sliced into potato chips. They did that because they conducted a survey in which 1 3 of respondents said the potato chips were not made from potatoes. [laughter] talk about not knowing where your food comes from. Not to mention the public has become increasingly wary of our food supply. Many fear the role of science in our food, even when there is evidence of all the benefits that i have just attempted to describe. The golden rice story represents a good example. Develops over a decade ago, golden rice, a fortified crop genetically modified to include betacarotene and which the body converts to vitamin a, has yet to reach the marketplace. The acceptance of golden rice remains uncertain even despite published research that suggests golden rice has the potential to help millions of if not tens of millions of children who suffer from five minute efficiency where rice deficiency where rice is a staple crop. Given how much we need to improve productivity to avoid a global food catastrophe as well as to address global issues of undernutrition and over nutrition, we simply do not have the luxury of ruling out any solutions that are safe, nutritious, and can improve Food Security. We need to embrace all of agriculture, from the small farm that feeds the community to the large farm that feed the world. As former president s and peanut farmer jimmy carter one side, responsible biotechnology is not our enemy. Hunger and starvation are. I could not agree more. We also need to educate and inspire our young people to help feed the world by owning these agricultural innovations. We should be better at integrating agriculture in the classrooms, whether it is trips to local farms or math problems dealing with irrigation. We can boost the efforts of groups like the global 4h network to teach our kids to be leaders and leaders of the 21st century. In fact, while many graduates are struggling to find job, i recently found that agricultural students are not only finding jobs but are finding off multiple offers. The farmer who will feed the world in 2025 is 13 years old today. When she grows up, to use all the tools at her disposal will depend on our ability to train her well and inspire her. For the significance of the task at hand. Finally, well we must expand our collaboration than education efforts, innovation can only flourish within a smart, sensible streamlined science based regulatory framework. In short, we have to craft a 21stcentury system that holds true to our oldest values while unleashing our newest advances. A recent study found the agricultural and bioscience industry is a 125 billion industry. Supporting nearly 2. 5 million jobs. With much more possible. It has been one of the few bright spots in this Global Economic downturn. Scientists are improving livestock production and bioengineering rice that can survive heavy flooding. In australia they are experimenting with wii to that can grow in saline soil, which would expand arable land. It is astonishing. But as is often the case, industry is innovating faster than regulatory systems are able to respond. As a result it can take a long as long as a decade and up to 250 million to bring Crop Protection products to market. It can take as long as 20 years and up to 150 million to discover and commercialize a biotechnology trait like pesticide resistance. We can establish a sciencebased regulatory system, one that respects health and Environmental Concerns and gives confidence to consumers and insurers more predictable timelines. When we do, innovation we have witnessed will be just the beginning of innovation yet to come. Another former president s family farmer Dwight Eisenhower said, farming looks mighty easy when your plow is a pencil and you are 1000 miles in a cornfield. It is true. It is Pretty Simple for a speaker to toss out some half baked notions. But do not take my recommendations about grain without a grain of salt. However, i have spent a fair bit of time reflecting on these issues. I believe that if we reorient about how wes engage the world, put Food Security at the center, and encourage innovation through collaboration, education, and regulation, we will be moving in the right direction. But that is entirely up to us. Those of us in this room, and the millions of farmers and Business People and government officials. A century and a half from now, when our grandchildrens children live in a world where only a few are fed or one where billions have their daily bread. With another longwinded speaker able to point to a incredible big are developed in a lab this year, or will those seeds never be planted, never unleashing the full power of productivity . I know which future i would like to see. I bet i know what you want, too. Last year a very dear friend of mine, a mentor and champion of food for all, senator george mcgovern, passed away. Just a few weeks ago we learned that Pope Benedict xvi will be stepping down. I am reminded of a different pope, pope john xxiii. A long time ago he met george at the vatican. George was having a president kennedys food for peace program. Pope john shook George Mcgoverns hand, looked him in the eye, and said, when you meet your maker and he asks, did you feed the hungry . You can say, yes i did. George mcgovern could say that 1000 times over. So can the millions of men and women and children whose farms and ranches and laboratories feed our families, even when we do not always realize or knowledge it. By continuing to plow ahead, develop agricultural policies and innovative ways big and small, so in deed can all of us. Thank you. Good to chat with you this morning. [applause] so, we have had three great addresses this morning. Giving us the outlook, the secretary challenging us in terms of human risks we can manage. And senator daschle. Really giving us an overwhelmingly moving tribute and challenge to american agriculture. A lot of fodder for thought. Now, the floor is yours. Our panelists are going to answer some of your questions. I do not know if we have mikes in the room, yes, no . They are in the back. I am being pointed to the back. If people could line up, we will have a little bit of time before a coffee break for questions. I will tell you what lets take a question from one of the students in the front. Ok. I think a microphone is coming. If you could bring it up here to this woman here in the front corner. Thank you. Go ahead. Maybe i will stand. I hope you can hear me. I am an undergraduate student majoring in agricultural business. My question for all of you on the panel about the issues facing agriculture today, innovation, rising population, barriers. What, in your opinion, is the greatest challenge or opportunity, if they are two sides of the same coin, that we are facing today . Who wants to start . [laughter] good, you will hear some better answers as we get a chance to think about the question. Could you repeat the question . I would say increasing productivity. I think senator daschle gave, as the deputy mentioned, a great speech on that. That is really the challenge. We look at population growth and look at the challenges because of things like Climate Change, because of resource depletion and other things, it is really a challenge. I think that is where our Research Money should go. I agree. I think that it is, you just heard me expound for probably too long about what i consider to be the biggest challenge. But we know the challenges that are out there and we know the resources and all of the tremendous collaborative talent that it will take to harness those resources to meet those challenges. Therein lies our biggest opportunity. Can we take all of the extraordinary talent we have, the resources we have, the innovation that is potentially there, and directed toward meeting the extraordinary demographic needs that we are going to be having as we go forward . That, to me, is by far the biggest part of this. I think the biggest challenge is figuring out ways in which what happens in rural parts of this country and around the world can be appreciated. And understood. Recognized, and supported. In order for us to have increased productivity we have to have young people wants to farm. We have to have young people interested in the research that is important and necessary to figure out how to do more with less. And we have to have political leaders willing to invest the resources to allow us to continue to promote our goods and be able to do the research and so forth that senator daschle indicated. I fear the biggest challenge for us is that gap that exists today in this country between those who live in cities and suburbs than those who live and work and raise their families in berlin areas. I think we have begun this to turn the corner on this. There is the beginning of that. I think agriculture is challenged to speak with a single voice about this. Far too often agriculture talks to itself. Fights with itself. Conflicts with itself. Instead of conveying a positive, proactive message and strategically engaging with folks outside of agriculture so that there is a greater understanding and of the importance of agriculture. Certainly the comments that is the biggest challenge. Ok. On the opportunity side i want to make an observation. You talked about the 13yearold who will be the farmer in 2025, and used to she as she this you describe that. I am very interested in changing demographics in american agriculture. Our last census had 30 of farm operators as women. That was a 19 increase over the previous census. Then we also have determining what will happen to a lot of working land in this country that is a really interesting opportunity. It really came into my mind when the senator talked about that 13yearold. And no our next now our next question will come from a woman. I have a Research Focus in nutrition and ecology. Thank you all so much for having us here. I certainly appreciated. My question is for tom daschle ack,mr. Tom vils made a profound statement in regard to the regulatory body process and how that is limited in regard to new innovation. Getting it from the laboratory to be implemented in regard to the policy and regulation process. What challenges and also what kind of changes have been discussed at this point . In regard to how to shorten and condense that process so that in fact we can take innovations in the laboratory and have them be impactful and meaningful answers daschle for sustainability sustainable . Wax wwere to and the process. One opportunity we see from challenges we face is encouraging usda to look at process improvement. We started with the biotech regulatory process. When i came to the opposite took over 900 days for us to make a decision about eight petition to deregulate a particular technology. Today that is less than 365 days. We have taken roughly 600 days out of the process through process improvement. The second challenge is not just our regulatory process but synchronizing it with everyone elses regulatory process. We Just Announced several months ago and opportunity with china to begin the process of synchronizing their process with hours. The way they do it in china, they wait until we have completed our process before they even began their process. We at least got them to agree to a pilot will they wear where they will agree to simultaneously with us. They will likely to end their process after we and hours. This is a major issue. It reflects the difference of sophistication of regulatory process. You can rest assured we are looking at ways that which we can streamline the process, but even if we do, unless we get the International Community to embrace this process it again becomes timeconsuming. Let me say, i applaud the secretary and his team for the remarkable progress they made in attempting to address the challenges you have eloquently articulated in your question. We always have to strive to find a challenge between risk aversion and innovation. That is always a judgment. It is an ongoing process. There is no end to that long challenge. There are three ps. One is preparation. We have to anticipate the preparation to the extent we can and preparatory. The second is partnership. We have to be prepared to work in a publicprivate sector environment where the partnership can move the process forward. The third is pragmatism. I think it is important to be pragmatic as we go forward. The more pragmatic, the more prepared and the more partnered we are, the more successful we will be. Im from San Diego State university. My question is for the secretary. I live in a rural county, a very rural county in california. We produce 5. 1 billion dollars of agriculture. However, it is the poorest county in the state and one of the poorest in the nation. I wanted to see, how can we use that 5. 1 billion we produced to help the community that is producing it . It is a very poor county. What can we do to allow these people to be paid more . There are several things. First, it is important to continue to expand Market Opportunities so the 5 billion becomes 6 billion become 7 billion. That goes back to the senators comments about productivity, but also our ability to promote domestic and foreign Market Opportunities. One of the benefits of trade efforts, we have seen every dollar we invest at usda trade promotion generating 35 of additional trade opportunity. We want to obviously continue that. Second, it is important for us to look for ways in which we can expand markets by using products differently. Specifically, whatever residue may result from the production of that product. Virtually every crop always has crop residue. There is land material, biomass with trees. How can we convert those into far more viable commodities . I think we see a rapid explosion in american agriculture in trying to figure out how to use those resources more effectively to produce chemicals and polymers. I have been in a factory ive been to the Forest Products lab in wisconsin where they are taking nanotechnology and converting armor that will be stronger and safer to use than current armor for our military and police force. There are amazing opportunities here. Third, there has to be a commitment to the community. We have a thing called strikeforce at usda. We are focusing on persistently poor areas in the country, taking out teams there and making sure all the resources and partnerships the senator talked about are actually being utilized. We find often times in those persistently poor areas folks are a little bit discouraged about government because they have not seen the assistance. With strikeforce we are beginning to develop new business opportunities, developing new markets. Beginning to support and strengthen communities. I think the president has proposed in his ladders of opportunity effort a real focus, providing intensive care to these communities that have high unemployment and persistent poverty. We started that with strikeforce. You will see more of that. I know these really brilliant questions from these young people have intimidated you all , but i have time for two more questions. Yes . Thank you. I work for arista life science. Inet secretary vilsack vietnam. For the past two years it appears the whole nation has been involved in a debate on healthe