Transcripts For CSPAN2 Today In Washington 20130226 : compar

And as we know, nonreligious private schools often cost four, five times that amount. So as a consequence, over 80 , close to 80 of students in the program are attending religious private school. So florida is not alone in that regard although it was one of the first off the mark. Florida s. T. O. M. P. Program has been implemented in a number of different states from indiana to louisiana to pennsylvania. So north and south, east and west. Such that the wall street journal called 2011 the year of School Choice. And 2012 had even more School Choice programs being implemented around the country. So at this point we are serving a dramatically altered cascade. So thats kind of a preamble to the types of world in which we are living right now. You may want to ask yourself okay, why are we doing this . What why might we have moved from a choice environment where students had, families had very little choice. The choice was essentially limited to the residential location for all intents and purposes, to a system in which in many states, many families have the opportunity to attend private school using public money. Those who arent going to private schools, many of them are going to start or schools, quasiPublic Schools. Even within Public Schools, even within the Traditional Public School sector you are seeing dramatically increased rates of what we call open enrollment policies. That is, policies that allow people to live in one part of town to go to school in another part of town. Why is that going on . Moreover, i would like to link the same policies together with another, another change in policy thats been happening. Which is the so called School Accountability moving. The School Accountability movement here in florida everybody is aware of the school grades, for example. But for people are watching who are not in florida, the are now every, nearly every state has some way of evaluating schools based on student test scores in which schools are ranked. In the case of florida schools are rated a f. They are based on a fraction of students who seem provision under states criterion referenced test for determining students proficiencies. They are also evaluating on the basis of student gains from one year to the next, our most test scores. And they are evaluated on a few other things. For example, high schools are evaluated according to things such as Graduation Rates and the like. But largely around the country and with here in florida, schools are evaluated primarily on either fraction of kids who use some performance threshold, or the gains from one year to the next, or largely in case of florida, a combination of the two. Okay, so why do we have these . I put these two things together, School Choice and School Accountability, together its something i will call marketbased performance. Because really for better or for worse, you heard, im an economist, a lot of the impetus behind these reforms have really been driven off into many of the education reformers have been motivated off by some theoretical where that came out of economics over the last few decades. And so its useful for people to think about what were some of the arguments, and thats a way for us to move into critically assessing those arguments. Okay . So why might people, why might we want to have increased School Choice . Economists like to think about evaluating various states of the world of policies according to two different criteria, equity and efficiency. And so i think its useful to start a document efficiency question. Now, i promise im not going to spend much time, so bear with me. Equity and efficiency is about as daunting as im going to get tonight. So let me just define efficiency for the moment. So often people are thinking about what people think about the word efficiency theyre thinking about how many widgets can be produced using certain types of technology, right . And a want to use a more expansive definition of efficiency, and thats what economists also like to think about. Lets just think about efficiency for the sake of our discussion tonight as are the schools, think about the quality dimension from better meaning more efficient, worse means less efficient. So we can defin find better anye want and thats okay from the point of the deal of this discussion. So keeping your mind what have you mean, what have you think means a better school. And that means more efficient. Now, within the notion of efficiency there are two different types of this is the last jargon. We have productive efficiency and we have allocated efficiency. All right. So in the case of for not showing efficiency when we talk about a school been more productively efficient, what that means in english is that the school is doing a better job, so whatever youre thinking that means, using their available resources. When we think about allocated efficiency what that really means is more about the idea that individual students are well matched to different schooling environment. Okay . So why might School Choice, again, we are just spending, describing the rationales and then we will talk about the other side. So now, why might School Choice lead to increased productive efficiency . Well, one argument made is coming this is an argument that was very popular amongst free market economists like milton friedman, for example, is the statement is to say okay, so if the school faces no competition, if a school knows that theyre going to get the same amount of money from the government regardless of whether or not theyre doing a good job or a bad job, if families dont really have an out or dont have an easy out from that school, they may be less likely to try to innovate. Of course, thats a very, thats a very pessimistic view of the world, basically suggesting that educators are only interested in revenue maximization and not interested in educating, per se. But you can tweak that however you want. The notion would be that educators care but two things. They care about making their job as easy as possible, and they care about, and they care about educating kids as well as possible. Arguably, the part they care about making the job as easy as possible, you know, that could be stronger, that may win out more in cases of which they dont have to compete for students. So proponents of School Choice may say if we now have more, if we make educators compete for students, educators going to try harder to do a better job educating students. Thats one argument. The allocative efficiency story maybe educators are not competing for students per se, but does every student, every student learns better in a different environment. So if we provide families with more choice, maybe families might select one school, they are presented with a wide range of school with options they may select some schools for some kids and different schools or other kids. And if we provide them those choices, maybe its not that the school will get better per se, but kids will be better matched to different schooling environments. Now, when we think about excellency equity for mama, people argue equity for School Choice is this notion that in some regard, many of us in this room have always had School Choice. And that is, we can choose where to live. So for example, if 20, 30, 40 years ago if your neighborhood shows your school, if you werent happy with the school that you were in for, you could move to another place. And so relatively affluent families have that opportunity. But relatively poor, so if we did like the Public Schools, therthat were private school ops we could pay for. We had all sorts of opportunities, but maybe poor families, or students of color who maybe were in neighborhoods that had been redlined over the years, such that they could live in certain neighborhoods, maybe those families had fewer choices. If you were poor or, maybe you couldnt afford it private school. Maybe their work neighborhood you couldnt buy into, for example. So the equity argument was a major one. And actually if we look back, if we look back to who were many of the and fellows at the dawn of the School Choice movement, you know, the modern School Choice movement in the 80s and early 90s, it was a combination of free market conservative, and often advocates for lowincome and minority groups. So for example, the urban league of florida has been a longstanding supporter of free School Choice option in florida. And it was often because what you had were allies, people may be focus on the efficiency side becoming allies with those maybe focus more on the equity side. So those are some of the arguments in favor of School Choice, increased School Choice option. Well now, its important to take a step back and think about why some of these things might not work so well. It might not work as well as we might thing. So i think that im very much a moderate, politically when it comes to these types of things. I think that mighty is the are very cute Silver Bullets that are out there, if any Silver Bullets in education. And why might they be very few Silver Bullets out there . One possible reason behind this is that if we think about the underlying economic model behind this communal, i often, people who are advocates will say things like well, what we need is the reason we want vouchers is the private School Market is already disciplined by the power of the market. So private schools dont need accountability goes private schools already are, they live or die based on equality. Well, that assumes very big assumption. So lets think about what the assumptions are that would make that true. One thing that would make that true would be if they were full information. So now, if i have a parent, nude soccer what went on at each and every school, perfectly, and could very clearly identify what was better and what was worse for my child, that could help to move us in that direction. But i dont think theres anybody in this world who was on a mission like that. And the underlying argument behind unimpeded marketplace choice of assumes that that is the case. Another argument, another underlying assumption there is that schools are just, can open and close like factories can. And we know that thats not true either. Theres no place where somebody has some great idea, they open a school and became immediately produce in the type of thing. That doesnt happen. Theres all sorts of hoops people have to go through, even in the private market, right . Forget about charters, et cetera. So then as soon as were moving more and more away from that, then we start to wonder a little bit. Okay now, if parents have an idea that they dont really know necessarily, which is school might be better for the kids, and the more you move away from this notion that parents really have a very good idea, the more you have to wonder a little bit about are we actually going to see the gains in allocative efficiency that are going on . Likewise, the more people might be moving based on noise as opposed to reality, i mean, change in schools for examples, the more we wonder whether schools really face much of an incentive to compete for students, right . If youre an educator and gina that parents are going to basically randomly decide what to leave no matter what you, are you going to do, even if you were, even if you bought into this notion that if i were carter somehow our work differently, that might make my school better. Why would you necessarily be responsive to that if sony was just flipping a coin to decide whether to stay or to go . Now im a little overly dramatic on the other side, but the point of the matter is that there are these strong assumptions that people sometimes conveniently forget when they talk about marketbased solutions to deal with education problems. Lets think about accountability for a moment. In the case of School Accountability, here the primary argument behind the School Accountability movement is often okay, i like, one more bit of jargon. Economists call it the principal agent problem. Theres no test on the no test on it is a but feel free to write it down. The principal agent problem works as follows, suppose that people, we in society are impressing educators to act on our behalf. But, of course, educators know more about whats really going on inside the classroom, inside of their schools than to other members of society. Well so, the argument then would be that potentialpotential ly educators might not get as good of a job or might prioritize things that we as a society dont care as much about because they are not being as closely monitored. So the theory would go that we just monitor educators more, that that will induce them to do the things we want them to do. Well, this is a good way of segueing a little bit into the part of the talk of which i talk about evidence. So heres one piece of evidence that is unimpeachable. Its true in florida. Its been true throughout the country. Its been true everywhere in the world where things like School Accountability has been instituted. And that is, educators are really good at doing the things that they get measured on. Its not just educators, right, its all of us. If you were told in your job year two different types of things that you have to do, and your paycheck is going to be determined entirely on one type and not very much on, and not at all on the other type, youre probably going to focus more of your energy on that. So theres nothing special about educators in this. Its just that educators, educators on the topic of tonights conversation. People are, so for a long time, there was a sign that said whats that says what gets measured gets done. That could be viewed as everything good or everything bad about the schools accountability movement. A lot of good or a lot of that. So lets think about the bad first, right . As i started out on the good stuff, whats the bad stuff . So suppose that we as society care about two things, being really simplistic. Lets imagine those two things just for simplicity our ability for kids to do algebra quickly, and ability to think critically and broad measures. And so suppose we have a test thats really good at measuring kids ability to do algebra quickly, but not at all good at those types of common you know, deep thinking skills. Well, the downside of what gets measured gets done would be that educators might focus more of their attention on keeping the things that are on the test. You know, quick algebra skills and them because theyre so many hours in the day, attachment to these other skills we might really care about. The plus side of what gets done, suppose the things that are on the test are actually things that really represent the skills that we value in society for the passenger gets to the. To a degree to which thats true, then you could view this as a positive, right . Theres been hundreds of studies that show this is what happens. But now there are other things that educators have done that you may wonder a little bit more about as to whether or not this is a positive or negative thing about School Accountability exciting recent people can disagree about whether even speaking to test, which in many circles has a very pejorative connotation, i think reasonable people can say some people might say teaching the test is good, another people may say teaching the test is terrible, right . And both could be true for different reasons. There are other things that people do that i think could be less positive. So ill mention two examples of research that ive done in different places, one in florida, one virginia. So in florida, as the dawn of School Accountability, i noticed that one thing i discovered was that, of course, who got tested, the kids who are in school on testing day. And so that made me wonder a little bit about whether or not schools might be interested, perhaps, in influencing who was there on testing day. So i looked at fights between high achieving kids in low achieving kids, and i found now that the test became high stage, that schools are really throwing the book at those low achieving kids, if it happened to be that they would be suspended over the testing period. And the high achieving kids, they could do almost anything and they were going to go to class the next day. That was happening much more during the testing period than any other time of the year. Dramatically more. And so its hard to tell a positive educational story for that, right . I mean, i thought for years about it and i have a hard time imagining a positive story for that. In virginia, so virginia was, so i talk about florida being an Industry Leader in terms of come in terms of School Choice programs. Well, virginia was an Industry Leader in testing. Anyone in florida think florida kids are tested a lot, just look north to virginia. Virginia has tested more subjects for longer. In fact, in virginia a lot of the testing takes place in the afternoon. So that made me wonder, okay, well maybe schools might want to try to very much like athletes cargo load before a priest and it turns out that actually they did. To a huge decrease. Im not talking about the obesity epidemic here. Still its only a few test dates so its not that virginias testing i seem headlines that say testing is making us fat. No, im fat. Has nothing to do with testing. Right . I mean, whats one of the things that we saw . You could look at the tests that were administered in the afternoon versus tests that were administered in the morning, and what we saw where the kids are doing better on the tests administered in the afternoon when schools went and had the opportunity to, well, you know, directly influence their mind. By the way, if youre interested in knowing what works for shortterm brain boost for whatever reason, so give yourself a dose of glucose or so for example, a glass of apple juice or School Choice<\/a>. And 2012 had even more School Choice<\/a> programs being implemented around the country. So at this point we are serving a dramatically altered cascade. So thats kind of a preamble to the types of world in which we are living right now. You may want to ask yourself okay, why are we doing this . What why might we have moved from a choice environment where students had, families had very little choice. The choice was essentially limited to the residential location for all intents and purposes, to a system in which in many states, many families have the opportunity to attend private school using public money. Those who arent going to private schools, many of them are going to start or schools, quasiPublic Schools<\/a>. Even within Public Schools<\/a>, even within the Traditional Public School<\/a> sector you are seeing dramatically increased rates of what we call open enrollment policies. That is, policies that allow people to live in one part of town to go to school in another part of town. Why is that going on . Moreover, i would like to link the same policies together with another, another change in policy thats been happening. Which is the so called School Accountability<\/a> moving. The School Accountability<\/a> movement here in florida everybody is aware of the school grades, for example. But for people are watching who are not in florida, the are now every, nearly every state has some way of evaluating schools based on student test scores in which schools are ranked. In the case of florida schools are rated a f. They are based on a fraction of students who seem provision under states criterion referenced test for determining students proficiencies. They are also evaluating on the basis of student gains from one year to the next, our most test scores. And they are evaluated on a few other things. For example, high schools are evaluated according to things such as Graduation Rates<\/a> and the like. But largely around the country and with here in florida, schools are evaluated primarily on either fraction of kids who use some performance threshold, or the gains from one year to the next, or largely in case of florida, a combination of the two. Okay, so why do we have these . I put these two things together, School Choice<\/a> and School Accountability<\/a>, together its something i will call marketbased performance. Because really for better or for worse, you heard, im an economist, a lot of the impetus behind these reforms have really been driven off into many of the education reformers have been motivated off by some theoretical where that came out of economics over the last few decades. And so its useful for people to think about what were some of the arguments, and thats a way for us to move into critically assessing those arguments. Okay . So why might people, why might we want to have increased School Choice<\/a> . Economists like to think about evaluating various states of the world of policies according to two different criteria, equity and efficiency. And so i think its useful to start a document efficiency question. Now, i promise im not going to spend much time, so bear with me. Equity and efficiency is about as daunting as im going to get tonight. So let me just define efficiency for the moment. So often people are thinking about what people think about the word efficiency theyre thinking about how many widgets can be produced using certain types of technology, right . And a want to use a more expansive definition of efficiency, and thats what economists also like to think about. Lets just think about efficiency for the sake of our discussion tonight as are the schools, think about the quality dimension from better meaning more efficient, worse means less efficient. So we can defin find better anye want and thats okay from the point of the deal of this discussion. So keeping your mind what have you mean, what have you think means a better school. And that means more efficient. Now, within the notion of efficiency there are two different types of this is the last jargon. We have productive efficiency and we have allocated efficiency. All right. So in the case of for not showing efficiency when we talk about a school been more productively efficient, what that means in english is that the school is doing a better job, so whatever youre thinking that means, using their available resources. When we think about allocated efficiency what that really means is more about the idea that individual students are well matched to different schooling environment. Okay . So why might School Choice<\/a>, again, we are just spending, describing the rationales and then we will talk about the other side. So now, why might School Choice<\/a> lead to increased productive efficiency . Well, one argument made is coming this is an argument that was very popular amongst free market economists like milton friedman, for example, is the statement is to say okay, so if the school faces no competition, if a school knows that theyre going to get the same amount of money from the government regardless of whether or not theyre doing a good job or a bad job, if families dont really have an out or dont have an easy out from that school, they may be less likely to try to innovate. Of course, thats a very, thats a very pessimistic view of the world, basically suggesting that educators are only interested in revenue maximization and not interested in educating, per se. But you can tweak that however you want. The notion would be that educators care but two things. They care about making their job as easy as possible, and they care about, and they care about educating kids as well as possible. Arguably, the part they care about making the job as easy as possible, you know, that could be stronger, that may win out more in cases of which they dont have to compete for students. So proponents of School Choice<\/a> may say if we now have more, if we make educators compete for students, educators going to try harder to do a better job educating students. Thats one argument. The allocative efficiency story maybe educators are not competing for students per se, but does every student, every student learns better in a different environment. So if we provide families with more choice, maybe families might select one school, they are presented with a wide range of school with options they may select some schools for some kids and different schools or other kids. And if we provide them those choices, maybe its not that the school will get better per se, but kids will be better matched to different schooling environments. Now, when we think about excellency equity for mama, people argue equity for School Choice<\/a> is this notion that in some regard, many of us in this room have always had School Choice<\/a>. And that is, we can choose where to live. So for example, if 20, 30, 40 years ago if your neighborhood shows your school, if you werent happy with the school that you were in for, you could move to another place. And so relatively affluent families have that opportunity. But relatively poor, so if we did like the Public Schools<\/a>, therthat were private school ops we could pay for. We had all sorts of opportunities, but maybe poor families, or students of color who maybe were in neighborhoods that had been redlined over the years, such that they could live in certain neighborhoods, maybe those families had fewer choices. If you were poor or, maybe you couldnt afford it private school. Maybe their work neighborhood you couldnt buy into, for example. So the equity argument was a major one. And actually if we look back, if we look back to who were many of the and fellows at the dawn of the School Choice<\/a> movement, you know, the modern School Choice<\/a> movement in the 80s and early 90s, it was a combination of free market conservative, and often advocates for lowincome and minority groups. So for example, the urban league of florida has been a longstanding supporter of free School Choice<\/a> option in florida. And it was often because what you had were allies, people may be focus on the efficiency side becoming allies with those maybe focus more on the equity side. So those are some of the arguments in favor of School Choice<\/a>, increased School Choice<\/a> option. Well now, its important to take a step back and think about why some of these things might not work so well. It might not work as well as we might thing. So i think that im very much a moderate, politically when it comes to these types of things. I think that mighty is the are very cute Silver Bullet<\/a>s that are out there, if any Silver Bullet<\/a>s in education. And why might they be very few Silver Bullet<\/a>s out there . One possible reason behind this is that if we think about the underlying economic model behind this communal, i often, people who are advocates will say things like well, what we need is the reason we want vouchers is the private School Market<\/a> is already disciplined by the power of the market. So private schools dont need accountability goes private schools already are, they live or die based on equality. Well, that assumes very big assumption. So lets think about what the assumptions are that would make that true. One thing that would make that true would be if they were full information. So now, if i have a parent, nude soccer what went on at each and every school, perfectly, and could very clearly identify what was better and what was worse for my child, that could help to move us in that direction. But i dont think theres anybody in this world who was on a mission like that. And the underlying argument behind unimpeded marketplace choice of assumes that that is the case. Another argument, another underlying assumption there is that schools are just, can open and close like factories can. And we know that thats not true either. Theres no place where somebody has some great idea, they open a school and became immediately produce in the type of thing. That doesnt happen. Theres all sorts of hoops people have to go through, even in the private market, right . Forget about charters, et cetera. So then as soon as were moving more and more away from that, then we start to wonder a little bit. Okay now, if parents have an idea that they dont really know necessarily, which is school might be better for the kids, and the more you move away from this notion that parents really have a very good idea, the more you have to wonder a little bit about are we actually going to see the gains in allocative efficiency that are going on . Likewise, the more people might be moving based on noise as opposed to reality, i mean, change in schools for examples, the more we wonder whether schools really face much of an incentive to compete for students, right . If youre an educator and gina that parents are going to basically randomly decide what to leave no matter what you, are you going to do, even if you were, even if you bought into this notion that if i were carter somehow our work differently, that might make my school better. Why would you necessarily be responsive to that if sony was just flipping a coin to decide whether to stay or to go . Now im a little overly dramatic on the other side, but the point of the matter is that there are these strong assumptions that people sometimes conveniently forget when they talk about marketbased solutions to deal with education problems. Lets think about accountability for a moment. In the case of School Accountability<\/a>, here the primary argument behind the School Accountability<\/a> movement is often okay, i like, one more bit of jargon. Economists call it the principal agent problem. Theres no test on the no test on it is a but feel free to write it down. The principal agent problem works as follows, suppose that people, we in society are impressing educators to act on our behalf. But, of course, educators know more about whats really going on inside the classroom, inside of their schools than to other members of society. Well so, the argument then would be that potentialpotential ly educators might not get as good of a job or might prioritize things that we as a society dont care as much about because they are not being as closely monitored. So the theory would go that we just monitor educators more, that that will induce them to do the things we want them to do. Well, this is a good way of segueing a little bit into the part of the talk of which i talk about evidence. So heres one piece of evidence that is unimpeachable. Its true in florida. Its been true throughout the country. Its been true everywhere in the world where things like School Accountability<\/a> has been instituted. And that is, educators are really good at doing the things that they get measured on. Its not just educators, right, its all of us. If you were told in your job year two different types of things that you have to do, and your paycheck is going to be determined entirely on one type and not very much on, and not at all on the other type, youre probably going to focus more of your energy on that. So theres nothing special about educators in this. Its just that educators, educators on the topic of tonights conversation. People are, so for a long time, there was a sign that said whats that says what gets measured gets done. That could be viewed as everything good or everything bad about the schools accountability movement. A lot of good or a lot of that. So lets think about the bad first, right . As i started out on the good stuff, whats the bad stuff . So suppose that we as society care about two things, being really simplistic. Lets imagine those two things just for simplicity our ability for kids to do algebra quickly, and ability to think critically and broad measures. And so suppose we have a test thats really good at measuring kids ability to do algebra quickly, but not at all good at those types of common you know, deep thinking skills. Well, the downside of what gets measured gets done would be that educators might focus more of their attention on keeping the things that are on the test. You know, quick algebra skills and them because theyre so many hours in the day, attachment to these other skills we might really care about. The plus side of what gets done, suppose the things that are on the test are actually things that really represent the skills that we value in society for the passenger gets to the. To a degree to which thats true, then you could view this as a positive, right . Theres been hundreds of studies that show this is what happens. But now there are other things that educators have done that you may wonder a little bit more about as to whether or not this is a positive or negative thing about School Accountability<\/a> exciting recent people can disagree about whether even speaking to test, which in many circles has a very pejorative connotation, i think reasonable people can say some people might say teaching the test is good, another people may say teaching the test is terrible, right . And both could be true for different reasons. There are other things that people do that i think could be less positive. So ill mention two examples of research that ive done in different places, one in florida, one virginia. So in florida, as the dawn of School Accountability<\/a>, i noticed that one thing i discovered was that, of course, who got tested, the kids who are in school on testing day. And so that made me wonder a little bit about whether or not schools might be interested, perhaps, in influencing who was there on testing day. So i looked at fights between high achieving kids in low achieving kids, and i found now that the test became high stage, that schools are really throwing the book at those low achieving kids, if it happened to be that they would be suspended over the testing period. And the high achieving kids, they could do almost anything and they were going to go to class the next day. That was happening much more during the testing period than any other time of the year. Dramatically more. And so its hard to tell a positive educational story for that, right . I mean, i thought for years about it and i have a hard time imagining a positive story for that. In virginia, so virginia was, so i talk about florida being an Industry Leader<\/a> in terms of come in terms of School Choice<\/a> programs. Well, virginia was an Industry Leader<\/a> in testing. Anyone in florida think florida kids are tested a lot, just look north to virginia. Virginia has tested more subjects for longer. In fact, in virginia a lot of the testing takes place in the afternoon. So that made me wonder, okay, well maybe schools might want to try to very much like athletes cargo load before a priest and it turns out that actually they did. To a huge decrease. Im not talking about the obesity epidemic here. Still its only a few test dates so its not that virginias testing i seem headlines that say testing is making us fat. No, im fat. Has nothing to do with testing. Right . I mean, whats one of the things that we saw . You could look at the tests that were administered in the afternoon versus tests that were administered in the morning, and what we saw where the kids are doing better on the tests administered in the afternoon when schools went and had the opportunity to, well, you know, directly influence their mind. By the way, if youre interested in knowing what works for shortterm brain boost for whatever reason, so give yourself a dose of glucose or so for example, a glass of apple juice or Something Like<\/a> that. But you dont want very much fat because fat slows the absorption of glucose into the bloodstream. To which you dont want is like brownies, snack wells cookies or Something Like<\/a> that. Low, something lowfat but high carb. Remember when that was good . That type of thing actually helps. Schools were doing that like crazy. They werent getting kids snack wells per se but theyre doing a nearly equivalent of that. What does that mean, right . So a lot of people misinterpret those types of bikes. But one important thing for you to take away from that type of thinking its possible to manipulate test scores. If schools can go and boost test scores like four, five, 6 by dosing them with sugar right for a test then that would suggest something about how much we Pay Attention<\/a> to these scores. So lets think now about one of the things we can learn about the design of School Accountability<\/a> system. Ill talk briefly about School Choice<\/a> and the design a choice, and then leave it open for 10, 50 minutes of questions. The one thing we can take away from this is that how do we want to maximize positive educational benefits and minimize the chance that schools are going to be, you know, suspending misbehaving will achieving kids for 10 days to keep them from taking a test, or to carpal load the kids lunches over to give him an artificial brain boost. One thing we can do is do what florida did in 2002. That is change the rules of the game so that schools are now judged not just on fraction of kids who get over and line, but fraction of kids are improving from year to year. Thats a little bit of simple vacation but i can spend on it if youd like on questions. So now think about this. You are being rewarded or sanctions on the basis of fraction of kids who improve. Now suppose you want to cargo load kids lunches. Now, youre artificially boosting kids scores of this year. That means next year you have to do even more and the after that you have to do even more, kind of like, you know, our kids get caught in a lie, right . You get caught in a lie and i have to, you have to interrogate even more just to try to get out of that lie and it ends up getting deeper and deeper and deeper. So ultimately what happened in florida is i didnt do the meal study but i did a disciplined study. Florida, as soon as florida changed its rules, that discipline thing went away. Heres Something Interesting<\/a> about florida. Florida is one of only a handful of states do have rules that make it less attractive to engage in that type of behavior. So say what you want about School Accountability<\/a> in florida, whether its a positive or negative, and to think that both positives and negatives associated with it, but in florida, florida has more of the positives and fewer of the negatives than in louisiana, california, massachusetts. Most other states in the country. Because of those types of rule changes that have taken place in 2002, more in 2007 for example. With regard to School Choice<\/a>, whats the answer . We are still learning a lot about School Choice<\/a>, but ill mention that School Choice<\/a> it seems very strongly that nowhere close to the super bowl at that a think advocates the Silver Bullet<\/a> advocates were hoping for. I think its nowhere close to the problem that opponents are fearing. So lets think about ive done a lot of research on the Florida Tax Credit Scholarship Program<\/a>. Thats a Voucher Program<\/a> that was providing scholarships to go to private school for a relatively low income kids, kids under 185 of the poverty line. So what have we learned about this . The first thing were learning is that the kids, who were the kids who used this your not just any low income kids. They tend to be the kids poor performing the worst in the Traditional Public School<\/a>. So it looks like thats a little bit of an argument in favor of mismatch, that maybe some kids were doing very poorly and parents are trying to find some alternative option for the. Whether or not they are succeeding, thats an open question. The second thing that weve learned about this in florida is that kids who are participating in the Voucher Program<\/a> are doing no better, no worse on average than the kids who they would have done had he stayed in the public school. To the extent to which were able to do. The statistics involved in the, more tricky than i would really like, but to my professional budget says they are doing no better no worse on average than they wouldve done in the Public Schools<\/a>. So people can interpret that being a positive or negative. People interpret it as negatively say, well, if theyre not doing any better, why are we taking money away from Public Schools<\/a> to give in to private schools with the kids are not doing any better . The Positive Side<\/a> is, maybe they are doing better in some of the less easy to measure type of things. And thats of course, we cant measure it because its a good i would be measuring it, right . I do know that families are happy with their choices, but thats something we know also, right . Everyone of us is always happy with our choices but its not just school, its Everything Else<\/a> that you were asked a, are you happy with that car you paid 30,000 for, even if you cant think it sucks, right, gosh, i love that car, right . And so when. So thats something a kid be viewed either positively or negatively. The third thing, this is something i do as a positive and kind of surprised me a little bit is that it does turn out that the Public Schools<\/a> seem to be doing a little bit better as a direct consequence of having this competition from the private schools. A little bit is the operative words. Because this has been misinterpreted, too. Some people say Public Schools<\/a> are doing better, therefore its a definite slam dunk. Its positive, its consistent, but its modest. So what does it mean . It means that maybe on the margin, especially certain types of schools, seem to be improving a bit as a consequence, at least along a certain set of observable lines. So where do i come down on the Florida Tax Credit Scholarship Program<\/a> . At least as it currently stands at is a relatively small program, its not that florida is blowing up the Public Schools<\/a> to do this, my view, where i come down on this is, is moderately favorable. I mean, there are some issues but there are also some positive benefits. But one of the thing that we see here is that the range of outstanding private schools participating in the program, there are a lot of outstanding type of schools. Their are a lot of really horrible private schools participating in this program as well, and what we really need and what i think is very important that we see happen is that any school, whether its Traditional Public School<\/a>, a Charter School<\/a> or private school, if youre accepting public money, there should be some high level of accountability for, or equal type of accountability. So i think what we still see in florida and other states is a little bit of a double standard, like Public Schools<\/a> need all this accountability and rules and measurements, but private schools dont need as much because after all, they are disciplined by the market. I dont think thats really true. Because if they were that would help me explain, truly desperately terrible private schools exist. Because, ultimately, i think there are no easy answers. If somebody were to tell me what would you do as an educationing czar, boy, i would hate to have that job. Because i think there are few easy answers. So ill leave you with one thought, and then well ask questions. So the one thought is, you know, we should think a little bit about all the education reform thats been going on and ask ourselves is this really helping our student kids do better . I mean, theres some evidence that says it is helping along the lines of the things measured on test scores. Our literacy skills, numeral skills, algebra, that type of things going on. But we have to think a little bit about what is special about American Education<\/a>, and there are certain things that are special about American Education<\/a> that actually are hard to measure on tests. I think now, im part of the Higher Education<\/a> sector, so, but its true that american Higher Education<\/a> is the best in the world. And american k12 systems have actually done a pretty darn good job over the years, including recently, of preparing large fractions of our society to be successful in the best Education System<\/a> in the world. Thats before accountability, before School Choice<\/a> and that type of thing. So one thing we need to think about is as thinking were thint these policies, we need to think about not only the things that are easy to measure, but also the things that are intangible because we could end up cutting off our nose to spite our face. So now ive confused you even more. Thank you. [applause] thank you. You have questions for me, huh . We have a few questions. Oh, boy. Only a few loaded ones. Great. First one is, i think, a great question. How can we give a good teacher an incentive to teach at a low performing school . How could we give a good teacher an incentive to teach at a low performing school . Well, i think that, um, i think that there are a few different types of things that we can do. I mean, one thing, of course, would be by compensation. So if there are schools that we have a difficult time finding excellent teachers to teach at, well, i mean, i am a believer in certain markets. One market i definitely strongly believe in is the labor market. So if were having difficulty staffing certain schools and it could be low performing schools, it could be schools in a certain neighborhood, whatever, right . Im supportive of this notion of differentiated pay for people to teach in, to teach in schools where its hard to get teachers to teach. So i dont see any other reason because, i mean, i think any other way to do that because in some regards the other choice besides compensation is to force people against their will to do things they dont really want to do. Now, some School Systems<\/a> do that, right in and other School Systems<\/a> do that only for rookie teachers. And then once you become experienced and you have status, then you can say now i want to go to that school, thats where i really want to teach at, or Something Like<\/a> that. So really we have two choices, right . We can either force people to do things we dont want to do, or we can make them want to do it. And im in favor of giving people reasons to do things as opposed to demanding they do things they dont want to do. Except when it comes to my kids. Then they have to clean their rooms. Right. Okay, now, this one required you to be a lawyer. Uhoh, im not. Opportunity scholarships in florida were declared unconstitutional, and those were scholarships given to children who were in low performing, failing schools. Now, what is different about the Corporate Tax<\/a> scholarship and the mckay scholarship that makes them constitutional . Um, im an economist i knew id catch you on that one. Im not going to touch that one. Okay. But thats a question our committee is asking, and were hoping to get some legal opinions on that. The argument that we have heard is that the Corporate Tax<\/a> rebates are charitable contributions. Now, well see how that plays out. Heres another one. You mentioned you were going to meet with tony bennett tomorrow. Hes the new commissioner of education. He is a supporter of School Choice<\/a>. However, he believes that it should not stand as is in that whatever School Receives<\/a> the money should still be held accountable like Public Schools<\/a>. How do you think this will change School Choice<\/a> in florida . Well, i guess ive already gone on record as saying that i think, um, schools that are, schools that are receiving public money should receive, should receive similar types of accountability. So i think that commissioner bennett is definitely speaking my language when it comes to that because we do see that there are i mean, i kind of view this a bit as a fairness issue, right . If were going to be saying we want you, Public Schools<\/a>, to compete with private schools, then first of all parents should have a certain type of information so they can judge for themself at least along some different metrics what the differences are between them. So then the big question becomes how will it change. Well, one possibility could be if private schools end up having to take the f cat. Right now private schools do not have to take the fcat. If you are participating in the Tax Credit Scholarship Program<\/a> as a private school, you are required to administer a nationallyreferenced test of your choice. For those of you who are veterans of Public Schools<\/a>, that for a while up until a few years ago was called the fcatnrt, for example. Now we dont offer that anymore. But it doesnt have to be. It could be the iowa test of basic skills. Some of these tests are okay well, its a question now, so ill have to go into jargon again. Some of these tests are more sumtive, theyre evaluating a set of skills that have already been attained. Others like the iowa test of basic skills are more informative. That is, theyre intending to tell people more about where to focus. The iowa test is add administered in the fall. Its hard to make those apples to apples comparisons. Ive been forced to try my hardst to make those types of comparisons, but its very difficult, and its not uniform. So i would encourage them. Now, i will say that commissioner bennetts ideas are not too dissimilar to what the people in the department of and education the Scholarship Funding Organization<\/a> step up for students that administers the scholarship have been pushing towards. So i know people in the School Choice<\/a> office in the department of education have for years been thinking exactly in this direction. And the Scholarship Funding Organization<\/a> has as well. So my hope is that there could be the rule of law behind it that because i think many of the key players in private School Choice<\/a> in florida actually want to see that, which i would like to see as well, but we have to have the laws to back it up. One more question. Okay. Does more choice lowerrer the quality of lower the quality of the nonchoice school because of decreased funding due to lowerrer student population . Well, thats really hard, right . So, of course, there are three different ways in which School Choice<\/a> can effect nonchoice schools. Ive talked about two of them already a little bit. One is the competition. So ive told you that the Available Evidence<\/a> suggests that providing School Choice<\/a> leads to small but positive degree of competition. So that way School Choice<\/a> is helping the nonchoice school. The second involves compositioning, who are the kids there composition. Who are the kids there. School choice can really go either way, right . Because it all depends. Some School Choice<\/a> programs might still lace the and the stimulate the best and the wrightest kids, and there its often families that make a difference. And especially in schools that are serving relatively disadvantaged populations with less family participation. That could be potential hi devastating to a school. On the other hand, suppose that School Choice<\/a> is leading some of the most disaffected kids or kids performing poorly to leave that school. That might end up helping improve that school. So the competition thing who stays, who goes can really work both ways. So then we get to the revenue, the resources. So the resources side is a mixed bag as well. So definitely at the level of the School System<\/a> itself. If School Systems<\/a> are losing resources, we have to think about the resources as, okay, one more bit of jargon, the marginal versus the average. Okay. So what happens is School Systems<\/a> are compensated by the state here in florida, for example, based on some measure of average costs. But its still, you cant just hire 1920s of a teacher, right . You have the hire a whole teacher. Which means that School Districts<\/a> may, if they lose the average costs, it may be the marginal cost of that last kid may have been only been pennies, but the average cost now is many thousand. Multiply that by a lot, and you can get into real, potential problems. Now, on the individual school level its less clear what might be the case. In fact, it could even be a case that individual schools might do better because of losing kids. Pause, for example, alatch what county Public Schools<\/a>, suppose theres a given school that has class size of 16 as opposed to 19 because three kids have left. Well, theyre probably not going to combine those classes and have class sizes of 32, or maybe they will. Im in a rich north shore illinois school. They wouldnt do that in mine, but maybe they would in florida, im not sure. But you can do whatever math you want. That individual school might be made better off by losing a few kids if they get to keep all of the same teachers, because now the teachers the class sizes have gotten smaller. So in that regard its a mixed bag. From a system level, i think its unquestionable that it can hurt, it can hurt. Not definitely hurt, but it can hurt. At the individual school it could either hurt or potentially help, fending. So, again, we can depending. So, again, we can close with some confusion. [laughter] david, thank you very much. [applause] definitely, you know, i like to, you know, i like to extemp rise more than you have to understand that all the founders primary concern, number one, numero uno, was with national security. So what would they say, for example, about a company such as lockheed . Im of the opinion that based on how they acted in other instances they would have grudgingly favored bailout of lock heeled because it lockheed because it supplied the United States<\/a> at the time with its top fighter jets and its top reconnaissance airplanes. I think you can make an argument that they would have supported, for example, the bailout of chrysler back in the 1980s but not the bailout of chrysler today. Whats the difference . Chrysler back then made tanks. They made the m1a1 tank. In fact, they were our only tank manufacturer. And its interesting, when chrysler comes out of debt and repays the government loan and kind of comes back to health, the main way they do so is by selling off the Tank Division<\/a> and plowing that money pack back into the economy. Larry schweikart on the Founding Fathers<\/a> and other key events in depth live sunday at noon eastern on booktv on cspan2. The agriculture d. Gave its annual agriculture outlook on thursday. Agriculture secretary tom vilsack talked about the upcoming automatic budget cuts and Climate Change<\/a>. We also hear from former senator tom dash l at this twohour event. [inaudible conversations] good morning, everyone. Good morning. Good morning, everyone. Ah, i hear some response. Im asking everyone to settle in for a great morning now. Hi there, everyone, im deputy secretary kathleen merrigan, and i want to welcome you to the 89th agricultural Outlook Forum<\/a>. So every time we have a conference like this the first person gets up yets the job of gets the job of asking you, please, silence those cell phones. Thank you very much. On behalf of the secretary and usda, our committee economists our chief economists, i really want to welcome you to arlington, virginia. Especially our International Guests<\/a> and all of those watching the forum by live webcast. We have several representatives here from foreign embassies, and we welcome you. Thank you so much. Were honored to have you with us. Organizing this conference means 2,000 people, 25 different sessions, its really quite a lot of work. So i want to begin by thanking the organizers of the conference for all theyve done. I work with a Top Flight Team<\/a> in the office of the chief economist. I particularly want to thank our chief economist, joe, and, of course, the world board chairman, jerry, for all the great work that theyve done. Theyve planned two very full days. I know were going to learn a lot. Along with the traditional commodity and food price outlooks, this Years Program<\/a> emphasizes the many ways agriculture must manage risk from finances to Natural Resources<\/a> to transportation. Finish and one of the things im really excited about in this particular program this year is more time spent on fruit and vegetables which i think are increasing importance in american agriculture, in diet, and were seeing them more center stage in this years outlook, and i think thats a terrific thing. I, um, also am really excited to be here because we have senator tom daschle as our great speaker this morning. I dont know how many of you have survived many congressional hearings like i do, and sometimes, you know, im sitting there, and im looking very intense. I actually have my fingernails drilling into my thumb to keep myself awake. Thats a truth. [laughter] but i had the glorious assignment when i worked on the Senate Agriculture<\/a> committee of being the person who chaired the subcommittee on ag research that tom daschle chaired. I have never been to such exciting Committee Hearings<\/a> as those. He would pull everyone up on the panel, and he would get them in a back and forth, engaged discussion with very pointed questions so that we pulled out really Important Information<\/a> about what we needed to do in the research enterprise. And so i learned so much of from this man that its 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, and our great leader, tom vilsack, has an opportunity today to share with us some of his visions for where were going in the second term. It does seem like its sequester, sequester, sequester these days, and that certainly does weigh heavily on our shoulders. But nevertheless, were plowing through, and we are going to do some incredibly great things in this second term, and im sure hes very excited to share that with you. I also want to, as i did last year, recognize that we have a lot of young people in the audience from the Outlook Forum<\/a> Student Diversity<\/a> program now in its seventh year. Twenty undergraduates and, for the first time, ten 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 the couple days. That would be great. I know how important these young people are because i have an alumnus of this program, johnny jones, who works in my office. And these are really the people who are going to lead american agriculture in the future. Many thanks to our program partner, the university of maryland eastern shore, and the sponsors who make this program possible, chs farm credit and usdass ers, natural conservatn resource service. Students, could i ask you to stand, please . There we go. [applause] thank you, congratulations. So 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<\/a> outlook. Joe glogger has been our chief economist for 15 years, and before he was deputy chief economist for 15 years before becoming the current chief economist, and i know hes someone you rely upon his analysis for all the work that you do and is someone who has the trust of the secretary and i completely. So, joe, let us know whats going on. [applause] well, thanks very much, and thanks for enhancing that resuee and letting me be chief economist for 15 years, that was good. I, too, would like to welcome everyone, and im just delighted to see such a large crowd. Weve had really great crowds the last few years, and i think its a tribute to jerry and the Program Committee<\/a> putting together such good programs. Um, well, in my comments today im going talk a little about the historic drought that affected the agriculture this year. Despite the drought i think the ag economy is very strong. Farm income as released by ers just two weeks ago, a nearrecord high. Record high in nominal terms for 2012 and for 2013 projected net cash income very close to record highs. Exports are a record as were going to find out, and i think the financial situation is quite solid. Low debttoasset ratio and assets at record highs. However, i think the aggregate measures belie some sharp differences between sectors despite the adverse weather. Row crop producers, i think, have fared fairly well, both with high prices and then record Crop Insurance<\/a> indemnities which have helped offset the losses that we saw this year. If youre an up insured farm or an underinsured farmer, there i think the crop losses probably are hitting those producers a little more than, certainly, those that have insurance. And if youre a livestock, dairy and poultry producer, this is the third or year since 2007 where weve seen record high prices with the effects that has on higher feed cost, tight margins and we have seen some particularly on the cattle side some liquidation. The outlook for 201 in a nutshell, were expecting a rebound in yields. We should see record production, i think, for corn and soybeans. That means lower prices and improved profitability, i think, in the long run for or towards the end of the year, certainly for livestock, dairy and poultry producers. If that sounds familiar and if you think im just taking the 2012 outlook speech and reading it, it does read very similar to what we said last year. Of we were expecting record crops, and we know what happened. And its just to say theres a lot of uncertainty in these marketsment one of the reasons why we wanted the to focus on risk in this outlook conference, but im going to, would like to go through as i go through the charts ill focus on some of these aspects. Well, first lets go for the export picture. Exports, as i said, are forecast at a record, 142 billion for fiscal year 2013. Thats actually down a little bit from what we carried in november but still record high. The first three months of this year, 43 billion in exports. Its a Staggering Amount<\/a> if you look and consider this, thats what we were exporting annually in the early 990s. 1990s. So just tremendous growth since 2005. Imports are forecast up to 112. 5 billion. Thats down a little bit, too, from our november estimates. But giving us a trade balance of almost 30 billion, 29. 5. Now, for the second year in a row chinas our major export destination. Remarkable growth there. Since 2005 exports to china have been growing by about 20 annually, and so now that they are now our top export market. If you look at what were sending to china, no surprise, its dominated by soybeans and cotton. They account, have accounted in recent years as much as threequarters of total trade to china. But if you look at some of the minor but still quite large other exports for things like coarse grains corn, for example if you look at feeds and fodders, distilled or dried grains, for example, or red meats, you see that those are showing impressive growth figures as well. In terms of overall exports, values are up for most of the commodity categories. Again, these are exports on a fiscal year basis. You can see that up for most of these categories with the one exception being corn, and well get into corn. But largely these are pricedriven events. We do see volumes up for some categories, but for most of the individual commodity categories were seeing lower volume. So the drought, obviously, having some effect. But for most of the commodities, those being offset by higher prices, so the values are up. Now, the big difference, obviously, is corn here. And its real striking that were down 38 . Again, on a fuss call year fiscal year basis in terms of the exports, and what that has meant is we are currently, excuse me, currently forecasting our corn exports at the lowest level since the early 1970s, i think 1971. Just a dramatic increase in corn exports such that if you look at where we are relative to our, the rest of the world, corn as many of you know for many years, the u. S. Was the number one and historically we have been the number one exporter of corn. You dont have to go back too many years ago where we had about 70 , 80 of that market. That has declined in recent years, particularly since 2007 as weve seen the increase in corn use for ethanol production. But this year in particular because of the drought lowest since the early 1970s, and because of the increased growth of production in Southern Hemisphere<\/a> and brazil in particular, were likely to be the number two exporter at least on a fiscal year basis. Now, i expect this to be a very temporary situation as we see the crops rebound this year. But again, because of the unusual circumstances this year of, one, a record crop in brazil, but then also the poor crop here in the u. S. Well actually likely see brazil being the number one exporter at least for fiscal 2013. Um, okay, lets turn to the commodity Balance Sheets<\/a>. Now, im, i promised all my commodity analysts that i wouldnt give all the details out so they can have something to talk about tomorrow, but i will hit some of the highlights here, and i think theres no question much like last year, were coming into this year with fairly low stocks globally for most commodities. If you look at wheat, were because of problems in the back sea region, because of problems in Southern Europe<\/a> Wheat Production<\/a> was down this year, and was of that and very and because of that and very Strong Demand<\/a> for wheat these past few years, weve seen stocks get dawn down again. Were at our lowest levels since 20082009. Not quite as low as what we saw in 20072008 but low and, again, hopefully with a good, Strong Production<\/a> this year globally, a return to more normal weather. We should see those stocks rebuild some. Corn, we know for the last few years very low stock levels this year are projected to carry out for the current crop year. If you look at it globally, were about at the lowest stocks in use ratio since 197374. This has been a very unusual year the last couple years for corn as its been drawn down by poor weather in the states last year but particularly because of the drought this year. The only other thing to comment on, soybeans, too, has been low stocks. We had a poor crop in south america last, this time last year followed by problems with the soybean crop, obviously, the u. S. Soybean crop because of the drought. Currently, a lot of concern over the size of the argentine and brazilian crop this year. Brazil looks, still looks good, but drought in argentina has a lot of analysts certainly looking at those numbers. The one exception here is cotton. And you can see that cotton in terms of stocks here expressed as day thes of use has increased dramatically over the last couple years. What thats being driven by largely is china. China has payoff policies to support because of policies to support producers, theyve been acquiring a lot of grain excuse me, a lot of cotton. You can see that cotton stocks have increased substantially in china. They currently account for over 50 of total world inventories. If you look on a commodity basis, i think the stocks as a percent of use in china is some 120 . That has certainly caused a lot of analysts to look at that and wonder how sustainable that is over the longer run. It casts some uncertainty over the large arer markets. Chinas a large importer of cotton for its textile mills, and so certainly with this sort of stock levels overhanging the market, i think this will lead to some uncertainty in the, in the Cotton Market<\/a> as we move forward into this year. Well, lets turn to planning, and i think, obviously, with the high prices were expecting continued strong plantings certainly for grains and oil seeds. Some well get some new lands coming out crp. This just 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 those charts where a lot of that area is coming out of, the dakotas, some of the areas, actually, where a lot of that area went in in the mid 980s. But this lammed, this has been historically wheat land, but as weve seen over the last five, ten years, a lot of corn and soybeans creeping up in those areas. Now, turning to the plan, in acres last year i think the combined acreage for corn, wheat and soybeans was some 240 million acres excuse me, 230 million acres. Thats the highest level for those three crops m combined since 1982. Now, 1982 wheat was much larger back then. Certainly, weve seen some of the largest corn plantings since the 30s over the last couple years, and we expect this year for corn to be very strong again. We have it down a little bit from last year, and thats largely because of the weather. Were assuming more of a return to normal weather. Last year if you remember the year started out great. We had ideal planting because of strong corn prices, a lot of people were able to get in corn. Just perfect planting conditions. And then, of course, the world turned ugly in june as the rain stopped in a lot of key states. But this year we expect plantings again to be very, very strong, off a little bit. Soybeans up a little bit. I think if you look at the soy peen corn ratio these days, i think it favors soybeans a little more than a few months ago, and certainly as we move towards march when we put out our planting numbers at the end of march, this will be something to look at. The one crop that sticks out is certainly cotton. As i mentioned, cotton prices are we have very, very strong grain prices. We should see some decline in cotton area. I think thats no surprise. And certainly the surveys that weve seen done by Cotton Council<\/a> and others would suggest that. Well, what about yield . This, of course, is where most analysts are directing their attention these days. If you look at the Drought Monitor<\/a> and i dare say few of you havent looked at a Drought Monitor<\/a> if you follow these markets or very closely, we still have significant drought in the central plains. And the good news is if you were to look at this map six months ago, we would have seen significant drought in illinois, indiana, in western kentucky. That actually has improved a lot. The forecast that noaas put out suggests some improvement, more improvement in iowa, creeping into the welcome back corn belt. But western corn belt. But the plains, i think, till look like they have till look like they have a persistent dryness. Now, that has some immediate implications for the winter crop. Hard red winter crap in kansas, oklahoma and nebraska currently about 50 of that area just doing a weighted average of the area and looking at the state crop conditions reports, 50 of that is poor or very poor or condition. So, obviously, spring runs are going to be very critical 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. So rains, obviously, very, very critical. What about the other, for the other crops . Well, what were looking at at least in our analysis is a return to trend yields. I think tomorrows commodity sessions will have, certainly grains and oil seeds session well have a paper there on our yield models and explaining how we incorporate weather in those yield models. But i think that both of these would result because were expecting record crops for corn and soy peens this year, again soybeans this year, again, dramatic improvement for corn. Remember last year between our may bro nexts and what we ended up with at the end of the year, we lost four billion bushels. Were expecting to rebound op that, up about that amount this year. So a very big improvement there. Wheat is the one area, i think, where there is concern, and i think we are anticipating a little higher anticipating for the hard red winter area. Luckily, the soft red winter crop, again, because of that being in the eastern corn belt, looks much better. And hopefully, well see some rebound there in terms of yields. But, again, a critical question that i think a lot of people are asking is, well, why normal yields . Why arent we expecting sort of another year of poor yields . And i think will the answer is threefold. One is that we, as i mentioned, we have seen some improvement. Weve seen the eastern corn belt look a lot better than what we saw just four or five months ago as a percent of total production and drought or total area and drought. Weve seen some improvement, 510 improvement over the last couple of months. And the other thing is that if you look empirically, if you look at the data, very little correlation between rainfall one year and rainfall the next year. I think most studies have shown that. So at least going into this year theres no reason to think necessarily that were going to be looking at a poorer crop. And lastly i think theres some issue on socalled yield drag. Well, what happens because of low subsoil moisture . Again, the paper tomorrow will go through that in more detail, but i just show you a real wonkish, economist thing here. All i did is i took preseason moisture in iowa, i looked at that relative to what normally we see in iowa, and then i looked at projected yields in iowa, just trend yields relative to what we actually saw that, you know, later that year. And as you can see, very little direct correlation here, very low its hard to put a line through any of that to say theres a direct relationship between subsoil moisture and result in yields. Now, some of those yields that you see on bottom part of that graph are, certainly, years you remember. 1988 which was, actually, a low subsoil year. Last year, which was down a little bit, but then you also see years that we had low subsoil levels and we had, actually, record or far above trend things. Its not to say and the last thing i want is a quote saying glauber says no relationship between drought and yields. [laughter] obviously, there is. But its just to say well be following this very carefully. Treat at least at this point in time theres no republican we wont be thinking of yields, and again, the proof obviously as we look into spring. But as we all mow for corn thats, essentially, the critical month is july in terms of precipitation and temperature. Okay. Lets turn to another issue here, and ill try to speed up a little bit. One is, and identify talked about ethanol almost every year just because ethanol has been such a large driver in the corn market and factor, obviously, in acreage decisions, so it affects others as well. You know, from 2006 to 2010 we saw ethanol production increase, corn use for ethanol increase by almost 700 million bushels annually. It topped five billion bushels in terms of corn use in 2010, was at similar levels in 20112012. Coming into this year with the brought we saw high prices, and as soon as we saw prices start spiking, we saw ethanol production start to drop. What this chart shows are the weekly ethanol production numbers from the Energy Information<\/a> administration. Ive annualized them so you get a feel for what they look like if they were to, you know, on a year for an entire year. And then those lines represent the caps, allowable caps under the renewable fuel standard. That is, how much conventional ethanol can be applied toward meeting the caps under the renewable fuel standard. And you can see from about mid summer those weekly numbers annualized have been below the caps, and we reduce our ethanol, corn use for ethanol numbers by about 10 this last year. And while we expect with a record crop that that will rebound a bit, were still calling for as we look forward to 20132014, were still calling for not, for about 4. 675 billion bushels of corn going into ethanol use. A third of that coming back, obviously, in the form of ddgs. But the fact is were not expecting that to rebound to five billion bushels. And i think there are other reasons for that. Certainly, the prices, the margins should be better. The problems are, actually, on the demand side. And weve seen gasoline consumption back at the time the energy act was passed in 2007. Our forecast or at least eias forecast for ethanol, excuse me, gasoline consumption was close to 150 billion bushels for 20142015. Just looking at a 10 penetration rate, that gives you about 15 billion bushels. Instead, however, of that or, excuse me, 15 billion bushel gallons of ethanol. Instead of that, however, weve seen because of high prices, gasoline prices, because of the recession and because of Energy Efficiencies<\/a> in our fuel efficiencies, increased fuel efficiencies, gasoline consumption actually has declined. And if you look at the eia chart here, that between line was actually what was looked at, what the Energy Information<\/a> administration was projecting for ethanol, for gasoline use in 2008. You can see now that their projections are for far lower and, again, in the outyears because of improved fuel quite a bit efficients, some decline. But i think the more important thing is whats going on over the next three or four years, obviously. And, again, with some decreases there. So if youre looking at a penetration rate of ethanol, weve been at a little under 10 . Unless we see adoption of further higher blends like e15 or e85, i think were looking at some fairly low numbers hoar on terms of im here on terms of implied use. I think this is a very important piece of the puzzle, at least the outlook pudz l that weve seen. Its, again, particularly compared to where we were in 20072008 when we were talking about yearoveryear increases and that. This is really at least for the next few years, i think, has been flattening out the corn use for ethanol and will be an important factor in that market. Okay. Let me get to the prices and then move over to the incomes and start wrapping up. We should see some, i think, some significant fall on prices with these record crops. This is not too unlike what i was saying last year. But with these sorts of things we should see corn prices, were projecting corp. Prices, season average prices below 5. Again, a big drop certainly from where we are. Wheat prices to come down a lit as well. Soybeans down. Some improvement for rice and cotton, actually, and thats largely due to the domestic Balance Sheets<\/a> that should tighten up a bit. Okay m well, thats going to, obviously, improve feed margins for cattle producers. Feed ratios have been very, very low. You can see the decline, longterm decline over the last seven, eight years. Now, understand that there has been a lot of productivity in these years, and declining feed ratios dont necessarily mean problems. But i think that theres no question that over the last, since 2007 with the three big price spikes, we know there have been problems at various times with the cattle, livestock, dairy and poultry sectors. And certainly weve seen tight margins. As we look out, i think we should see some improvement there. Were certainly expecting prices to increase. Our current prices for, again, cattle and broilers were forecasting record highs. These are all very, very high prices for, i think, for the meat and poultry and dairy markets. However, what i think will be the real benefit to this sector will be at the end of the year x hopefully i think the critical thing, obviously, with the problems the cattle sector had, we lost 3. 4 million head over the last two years in kansas, oklahoma and texas alone. Now, the rest of the herd, the nations herd was pretty much constant. We had losses and gains that were offsetting. But in the southern plains, no question the drought in texas two years ago and then this past year has really affected cattle there. And we know that 60 some odd percent of the pasture conditions, pass you pasturen this country over the summertime was in drought. So critical thing particularly for beef and lesser degree for dairy will be better rains early on in the spring so that we see some improvement in pasture, or i think we could, unfortunately, see further liquidation. Okay. All this, what this means for food prices, we will see some transmission of these higher prices, higher livestock prices in particular into higher food prices. Ers is currently projecting food inflation to increase by about 34 . I believe theres a session on that later today. But its important to realize that at least at current levels if you look at the most recent month, i think its december looking at that or, excuse me, in fact, report came out today which i dont have the numbers for. But our current levels of inflation very low, 1. 3 yearoveryear for the most recent month. But we will expect that to increase. And, again, as i say, ers is forecasting some 34 over the next, for 2013. High but not nearly as high as i think what we saw in 2008 or what we saw in 2011. All right. As i mentioned at the outset, ers put out numbers on february 11th on net cash income, net farm income. Net cash income down a little bit this year or at, excuse me, 123. 5 billion. Thats down, but you can see still high at least in nominal terms relative to recent years. We have, we recorded a record in 2012. Record receipts the last couple of years approaching some 400 billion. I mean, just phenomenal. I mean, you can see just how rapid thats been. Back in the early 2000, 2002, 200 billion. So really a doubling of receipts over the last ten or so years. But also weve seen high expenses. Now, some of that, of course, has been feed, and feed has been, is a critical component for the livestock markets. If i look at this just on some of the, looking at net cash income, ers looks at Farm Business<\/a>es, and these are just sort of average perfarm for Farm Business<\/a> data that ers pulls out of their survey. And there these are just indicators, obviously, that their forecasting cash income to decline a little bit most of the row crop producers this year. Again, high relative to say four or five years ago but still down from last year. Um, and then for livestock i think there again another year where weve seen some decline. And you can see, you know, dairy back not quite as low as what we saw in 2009, but i think this, again, 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 thicks to get into where were, get into the fall, late summer, early fall where we should start seeing feed prices come down that can help profitability return to the sector. All right. Well, with that let me just wrap up, and i just would say, again, this sounds a lot like deja vu or one of those dejas that youve heard this before. And admittedly, very, very similar to our forecast last year. I think, obviously, the big issue, i think the most, the critical factor here that people will be following is weather. And certainly with drought and with the nation continuing, a lot of the country continuing to be in drought, theres going to be a lot of people concerned about the weather. Well be. Watching it very, very carefully. However, i do think that at least the Empirical Data<\/a> suggests return to more normal yields as we move into spring. And with better rains and a return to more normal weather, we will hopefully get some higher yields and a return to which should help moderate prices and improve profitability for these other sectors. And with that, i will b conclude. Thank you. [applause] thank you, joe. So now i get the opportunity to introduce my boss. Many of you know his story, but for those of you out there listening in case, here it is he started as a lawyer in iowa, small town helping farmers struggle through the farm crisis back in the 70s. And then tragedy hit in his small town, and he became the mayor. Fast forward, he became a twoterm governor in the great state of iowa. Candidate for the president of the United States<\/a>, and then our secretary of agriculture. Hes commencing his second term along with the president. Hes been giving some tough love talks across the country, and i say tough love, tough in that hes really pointing out some issues that we need to grapple with in american agriculture in terms of our 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<\/a>. And i say love in tough love because he does so with passion, he does so with finding ways to entoys young people to entice young people to careers in agriculture, and he does so as the hardest working secretary of agriculture we could ever have. So, ladies and gentlemen, welcome him to the stage. [applause] thanks very much. Thank the deputy for that kind introduction and for her leadership on a number of issues including the local and regional food systems which has become an integral part of not just this conference, but of agriculture and do Economic Opportunity<\/a> the Economic Opportunity<\/a> in Rural America<\/a>. Her work with know your farmer has really made a difference in this direct to consumer sales opportunity which is now a multibillion dollar part of agriculture. And i also want to thank joe and jerry for putting on this conference. Its amazing, every year we come here, and every year you all come here and, joe, every year you give the same damn speech. [laughter] but it could be worse, right, . It could be worse. Of. [laughter] and i particularly want to thank senator daschle for spending a few minutes with us today as the deputy indicated, folks in washington, d. C. And around the country have the highest level of respect for tom daschle, and ill say a few words about him as i introduce him in a few minutes. But were really pleased to have you, senator. Thank you very much for taking your time. So heres what happens when joe and jerry get together. They put together a program, and they decide to put a title on it, and then they broadcast the title and the Program Throughout<\/a> the usda halls. So everywhere i walk i see these big posters, and on the posters there is this managing risk in the 21st century. And i thought to myself, well, this is an opportunity for us, obviously, to celebrate the fact that we do, indeed, have expanding exports at record levels, and were seeing an expansion perhaps beyond biofuels, as joe indicated, into the bioeconomy where were making more product, chemicals, fabrics and fibers, a variety of things from plant material and crop residue. Weve got the local and regional food system expansion which has been great news, record expansions of farmers markets and food hubs as a result of the deputys work, and weve seen farmers embrace conservation with over a half a million producers now engaged in conservation practices around the United States<\/a> with record numbers of acres enrolled in conservation, record foreign income, even more excitement among young people about agriculture. In fact, the other day i was in iowa at the World Food Prize<\/a> headquarters. A young lady came up to me and said she wanted to thank usda for the work its been doing recently. And i said, well, i appreciate that, assuming she was going to talk about the record farm income or the record exports. But what she wanted to thank us for was in the 1980s when she went to school and she major inside agriculture and she got her advanced degree in agriculture, 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 whats been happening in agriculture today, payoff the activities because of the activities of usda and of the folks in this room, she said agriculture is cool again. And i took that as a great sign, and weve got some great young people here today who no doubt are passionate and excited about their future careers in agriculture. So im thinking to myself, whats joe worried about . Why do we have to manage risk . Things seem to be going in the right direction. And then i began to make the list. Of all the things we actually should be concerned about. And what dawned on me was that normally when you talk about agriculture and risk, as joe just did, you talk about the weather, you talk about drought, things that you may not have a lot of control over. But the uncertainty and the risk in agriculture today in many cases are manmade. Let me give you a few examples. There is risk in the up certainty uncertainty witness to budgets and the impending sequester to agriculture. You all know that march 1 will come, and if it comes before congress has acted, that the sequester will be triggered. And what that will mean for usda is every line item, virtually every line item of our budget will have to be reduced by a certain percentage. And that percentage could be somewhere in the neighborhood of 56 , and thats an annual percentage which means we have to implement this reduction in the remaining portion of the fiscal year. Which will be approximately six months. That means its really the impact of a 1012 reduction of our remaining resources. And unlike normal circumstances where the congress will direct you to reduce funding but give you the flexibility to choose where and how, this is a direct prescription from congress to reduce every line item by the same percentage. Now, if youre fortunate to be in an agency or part of the department that has lots of lines, you have some degree of flexibility. But if you happen to be in an agency like food safety where you have very few lines and where most of the lines involve people and labor, you have very little recourse. And that is a risk that we now face. Because the only way we can absorb a cut of this magnitude is by impacting the people who work in the food safety area of usda. Finish and we all know that when we do that, it momentum just impact those workers it doesnt just impact those workers, it impacts the plants and production facilities across the country. Now, theres a way to resolve this. Congress can give us flexibility and say we didnt really mean every line item across the board with no flexibility in six months. Or they could come up with a larger deficit reduction package that would avoid sequester. But be they fail to act but be they fail to act, then we are required by law to invoke the sequester. And we will do what we have to do. Because if, as you all know, usda is guilty of spending money it doesnt have under the auntdeficiency antideficiency law, there are sieve and possibly criminal civil and possibly criminal penalties associated with that. So we take our job very seriously at usda. Its something we dont want to do, but it may be something we have to do. And this is a risk that is manmade. The same thing is true on march 27th. March 27th comes, 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. And that, of course, would impact our trade promotion efforts, it would impact food safety, it would impact the ability to provide credit to farmers right at the time when they have to finalize the Credit Opportunities<\/a> to put their crop in the ground. This is another risk thats manmade and can be avoided. Then theres the uncertainty and the risk associated with not having a fiveyear farm bill. We know that the Senate Passed<\/a> a farm bill last year, we know the House Agricultural Committee<\/a> passed a farm bill last year, but it did not get done. And that now creates uncertainty as to what the safety net will be for farmers who are face with the the drought or the conditions that joe just talked about, who where through no fault of theirs, theyre facing economic disaster. Because we dont have a farm bilker those livestock producers that were hurt so badly in 2012, those dairy producers, those poultry producers were not afforded the opportunity to have the kind of Disaster Assistance<\/a> that was in effect the year before. And so they now face a financial risk thats manmade. We need a farm bill, and i like to refer to it in our shop as a food, farm and jobs bill, because 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. And make no mistake about this, this is not something to be taken for granted. Because many, many, many countries around the world cannot say that. It makes us a stronger and more secure nation. Brought to us by American Farmers<\/a> and ranchers and producers. They need a safety net. If were to build this Rural Economy<\/a> and create Economic Opportunity<\/a> for these young people that are excited about living and working and raising their families in a small community, then we have to complement production agriculture and its safety net with a strong commitment to bioenergy and bioeconomy. The future where virtually every aspect of what we grow and raise can be used to produce virtually everything we need in our economy. Its how you actually strengthen and build a middle class in Rural America<\/a>. We get back in the business of making, creating and innovating. But you cant do that unless you have a food, farms and jobs bill that has an energy title. You cant continue to see the expapping of local and regional food system and the entrepreneurial opportunities that creates in rural areas unless you have a fiveyear program. And you certainly cant resolve trade disputes, including the one weve 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. So those are risks in todays agricultural world that can be resolved by congress doing its job and getting a bill passed. Then theres the uncertainty of labor. Another manmade issue. Where agriculture relies to a great extent on immigrant labor. And everybody in this room understands and appreciates that a good deal of that labor isnt necessarily in this country legally. And that has been the case for a long time. This is a risk to agriculture, and were beginning to see the implications of that risk because weve had crops that were grown last year that could not be harvested because there simply werent enough hands to pick them. Its important and necessary that we have immigration reform, that we create a system in this country that understands and appreciates the importance of imgrant labor 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 the pay back taxes, to learn the language and then creates an opportunity for these folks to be here legitimately so that they can provide the labor and the work thats 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 joe report about food inflation at 3 and 4 , thats actually more of a normal rate of inflation. We still in this country enjoy the fact that less than 10 of our paychecks are spent on food. You go to most other developed nations or developing nations, youre going obey 15, 20 youre going to pay 15, 20, 25, 40 of your paycheck for food. So not only do americas farmers and ranchers in the system here create this enormous diversity in this great Food Security<\/a> we enjoy, but it also comes to us at an affordable price. But theres a risk if we dont have comprehensive immigration reform. Its a manmade risk. Itit can be resolved. Then the uncertainty of trade pairiers. Barriers. Created by other nations. Right now were dealing with a decision made by russia to impose a ban as a result of the use here of rack taupe mean that is not scientifically based and is contrary to international law. Our office has stated very clearly its our expectation that russia will reverse that decision. Thats another risk to the livestock industry thats manmade. Now, fortunately, we got some good news yesterday as the Scientific Commission<\/a> from oie has now indicated that the u. S. Can now be considered a negligence jill risk nation for bse, and hopefully that will be confirmed this summer. And we further got good news with additional opening of markets, particularly for our beef. Last month we talked about the opportunity that japan is now affording for a wider market in japan which is good news, and weve had the korean Free Trade Agreement<\/a> and the opportunities that presents. Weve also seen mexico relax some of its restrictions on beef purchases and today hong kong will join that list by indicating a willingness to take all deboned beef products of any age and bonedin beef less than 30 months. So an expanding opportunity where trade barriers are coming down. But these barriers still exist which is why its mess and important for usda to continue to advocate for American Farmers<\/a> and ranchers all over the world as these barriers are constructed. We have of to tear them down. Now, those are all risks that are faced, that we with face in agriculture today that are all manmade. Can be resolved with action by congress or by the International Community<\/a> following science and rules. There are, however, risks that we cant control, and joe talked about the drought. Now, following the consequences of the drought last year, the president directed us to create a Drought Task Force<\/a> which was made up of all federal agencies to try to mitigate the impacts and effects of doubt. Drought. That led us to begin thinking at usda about steps we could take to help producers during a very difficult time, and we took a series of steps. We opened up crp land and provided some relief on Crop Insurance<\/a> Premium Payments<\/a> and things of that nature. But it also got us thinking were there other steps, other things we should be doing in order to provide help and assistance . And it occurred that perhaps we should be focused more acutely on the need to encourage mull i crop multicropping throughout the United States<\/a> . In order for us to do a better job of conservation, in order for us to create additional biomass that could be a Revenue Source<\/a> and potentially allow us to conserve precious Water Resources<\/a> with the use of cover crops which in turn would allow us to get through these drought circumstances this a more favorable circumstance. And so we have begun a process of looking at ways in which we could provide assistance. Now, you will be fortunate to hear from a fellow by the name of david brant who is here who will give a presentation during the course of this conference. Daves got a notill nutrient Management System<\/a> that hes put in place since the 1970s that involves multicropping and double cropping. He tells us that this has increased the organic soil matter in his soil. It saves about 100 an ache other than nitro an acrer on nitrogen, its increased his corn yield and his soybean yields 8 . Thats something that ought to get everyones attention, and at usda we ought to be looking at ways in which we can reduce the manmade barriers to multicropping so that that can be another strategy for managing risk. Recognizing that there are different types of multicropping whether its double cropping or cover crops or an integrated crop livestock arrangement or even agri forest try. And so this year were going to spend time better understanding the barriers that exist for market availability for a product that could be produced, for the lack of insurance or the difficulties that we can create through our Crop Insurance<\/a> programs that discourage multicropping to looking at the effect on the yields of the primary crops that are being planted and where our knowledge gaps exist in terms of the supply chain and the Delivery System<\/a> so that we can encourage of this activity. Well use our Conservation Innovation<\/a> grant money at nrcs 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 multicropping arrangements around the country. There are great examples. And well provoid information on provide information on the steps that well be taking to reduce those barriers that weve 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 in turn give us yet another tool to deal with a changing agriculture and managing the risk. Now, as we started thinking about multicropping, it to occur, it occurred to us that, indeed, we have a diverse agriculture in this country, and there are different Production Systems<\/a> that people want to use. Some folks may want to use ge technology, and some people may want to to a conventional way, and some people may want to be organic producers. And its important for us at usda to recognize and to respect all production processes. And troying to make sure trying to make sure that everybody has an opportunity to choose the type of operation thats best for their family and themselves. Thats why we put together a group of folks, and we challenged them to think about how could we create a system and support in this country where different production processes could, in a sense, coexies in the same 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 many a room for about a year and a half, and they had great leadership from russell reading, and these folks looked really hard to come to a set of conclusions. They basically models what we ought to be doing in this town more frequently which is coming together and figuring out where the Common Ground<\/a> is, where the moderate middle is. They came up with a series of recommendations to what we called the ac21 committee. And today were posting on our web site the next steps in that process so that we can tell those 22 folks who worked hard that were following through on their recommendations and, more importantly, we can tell producers of all types that there are ways in which we can provide help and retuesday the risks that reduce the risks that may be associated with different production processes trying to live in the same space. Were going to engage in research, and were going to look at ways in which we can create measures to strengthen this notion of coexistence. Part of that research will focus on creating an inventory of actual Economic Loss<\/a> so that we know precisely how often there may be circumstances where crops are compromised as a result of activities. In other areas. Were going to do case studies, and well 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 that theyll know precisely what works best. Were going to create a competitive grant, and that grant will basically fund a conference that will be held this year. Well bring experts in to discuss information about gene flow so that we have a better understanding of precisely what happens. So in turn we can mitigate the risk of that occurring that could potentially be damaging to someone elses crop. Well continue to look at ways in which we can indemnify or compensate those who may have suffered a loss. Were going to have nas review its cay that to data to get a better handle on how to price organic crops, and they are, in a sense, sort of a different commodity, if you will. Ask some of the normal practices, some of the normal surveying techniques may not work quite as well for organics as for conventional agriculture. And that will give us enough information to do a better job of understanding how to set up insurance policies and programs for these organ withic crops. And well focus on quality. This spring well launch for the first time the National Genetic<\/a> advisory council, and we will be tasking that council with looking at how we can evaluate the availability of nonge seed for producers who might be working and producing in gesensitive markets. Well review and evaluate best Management Practices<\/a> for the testing and monitoring and maintaining the purity of publiclyheld germ mass m because theres a concern about that. And well, hopefully, continue our efforts outreach. All of this is designed to manage, eliminate, mitigate the risk that is associated when folks want to do things a little bit differently, but they want to do it in the same general space. Its part of managing risk. And then there is the large risk, the longterm risk that we face with the changing climate. And ill conclude with this. Theres no question that the climate is changing. We recently furnished two assessments from usda on the impact of changing climates on agriculture and forestry, and 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. And we at usda have a responsibility to figure out ways in which we can mitigate the risk of something that we really cant control, in a sense, when it happens. We cant control when a drought occurs, we cant control when a horrible tornado hits or when flooding occurs. But we can take steps to mitigate the impacts and effects of that. So heres what weve done and heres what were going to do. We released this year the first usda Climate Change<\/a> adaptation plan, and were outlining practical steps that can be taken right now to reduce this risk. Were expanding pest forecasting so we have better models to give people a sense of what happens with intense weather patterns and its impact on expanding pests and diseases which are a risk that we need to control. Were going to incent and increase our efforts in Soil Health Management<\/a> in creating systems for farmers and ranchers that they mic interested they might be interested in. Were going to have rma work with its partners to create a web portal that will provide information on climate and weather, so in turn well have enhanced ability to adjust losses more quickly and more accurately. Weve channelinged the forest weve challenged the Forest Service<\/a> to begin incorporating Practical Applications<\/a> for mitigation and adaptation strategies for our forests and our planning and Management System<\/a> work. Now, the next steps require developing a road map. We want to provide practical advice to our farmers and ranchers in ways in which they can reduce risks 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 mitt gate the impact. Mitigate the impact. We saw this with the drought. Its amazing despite the drought, we still had a relatively large corn crop given the extent and severity of the drought last year. And the reason we did is because of the technology and the techniques that our farmers use. So we need to better support applied Climate Change<\/a> research. We need to make sure that we have resources going into this research so we can provide you with the information that allows you to manage risk. We need to improve our outreach and our extension so the information we have and our opportunity 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 climate and the differences that climate has on various or crops that are grown in different parts of the United States<\/a>. We understand and appreciate that different regions have different needs. So were going to be very aggressive in this effort because we you said and appreciate we understand and appreciate after the foods of 2011 and the drought of 2012 that folks need this assistance and help. And by doing this, by taking these actions, we can hopefully mitigate and help you manage risk. Why is this all important . Its pretty obvious. Rural america as a result of most of the farming and ranching that takes praise in Rural America<\/a> place in Rural America<\/a>, is the number one place for Food Production<\/a> in this country, the number one place for most of the water that is consumed everywhere, its number one place for the production of energy of whatever source whether its oil or natural gas or renew bls. The its the source of, as i say in virtually every speech i give, of a disproportionate number of those who serve us admirably and bravely in our military. Its an important place in america. And the people who are working hard in that important place require us to do everything welcome to allow them the to continue to help make us a more secure and strong ther nation. They will be able to deal with weatherrelated risks. Thats what they deserve, and we at usda are going to do everything we can to help make that happen, but we need you to be engaged in this process. We need you to encourage those in congress to help us help you. We want to continue to make agriculture cool. We want these young people to be inspired by the fact that agriculture is the answer to the moral dilemma of our time, how we feed an everincreasing World Population<\/a> as resources become scarce. It is agriculture in rural parts of this country and around the world that will provide the adaptation and mitigation strategies to sequester carbon to control and to mitigate the impacts of Climate Change<\/a>. It is agriculture and rural parts of this country that will provide a new Energy Future<\/a> for this country, and it is agriculture that will help spur a new American Economy<\/a> that is focused again on making and innovating and growing and manufacturing and exporting. Thats why this is important, because the longterm security and safety of this nation is absolutely dependent on us managing these risks that we have identified today and that will be identified over the course of the next couple of days. Its that important to this country, and you all can help. Now, one man who understands this, better probably than most, is tom daschle. I can say a lot of things about tom daschle. I can talk about his military career, having served our nation in the air force. I can talk about his service in the house of representatives, his extraordinary leadership in the senate, being, i believe, the only person ever to serve as a majority leader and a minority leader. That says a lot about this man in terms of what his counterparts thought of him. But i prefer to talk about tom daschle, the father and grandfather. The reason i do is because i think you can tell the measure of a man or a woman by their children. Tom has got three great kids. Ive had the pleasure of knowing all three. His daughter kelly is a journalist, an awardwinning journalist for ap. His son, nathan, is a social entrepreneur, and his daughter lindsay, my favorite, he cant cant say that. Lindsay basically led that effort, and she left the usda because she had a calling to help kids in trouble, and shes pursuing an advanced degree in social work. And her proud father told me just a few days ago that shes grandchildren, that says a lot about tom daschle. And what hes going to share with you today are his insights. I saw him the other day at a lunch in one of the restaurants in washington, d. C. , and what impressed me the most about what i saw was that virtually no one entered that restaurant without stopping at tom daschles table, and we are fortunate and privileged to have him here today. Ladies and gentlemen, senator tom daschle. [applause] thank you, tom, for the very, very generous introduction. It is so nice to be with all of you, give you this morning. And i do mean morning. Only at a ag conference can you hear for speakers by 9 00. [laughter] tom vilsack just gave us an eloquent and powerful analysis of the risks we face in agriculture, manmade and natural, and it was a reminder yet again, his extraordinary leadership that we have and are secretary of agriculture today. I consider him a very, very dear friend, and unparalleled public servant, someone i admired and immensely for so many reasons, but in particular because of his mentorship of the young daughter of mine, lindsay. So i thank him for all that he does, not only for my family, but for all of us each and every day. I also want to thank kathleen and joe for their thoughtful presentations today. I dont know about you, but i have learned a great deal just in the first hour of this conference. We have a lot more to go. But you talk about dedicated public service, leaders that serve with selfless determination. Youve got three of them writer at this table. Im honored and flattered to be part of the program this morning. [applause] being here, im reminded of an open door meeting that i had in the rule part of south dakota several years ago. As a lot of you know in our small town, we dont have a lot of choice when it comes to where we meet, and its oftentimes in the local goodfaith bar, and i used to hold these Public Meetings<\/a> as i know that tom has done through iowa for many, many years. But in this particular open door meeting i was about to start and the farmer interrupted me just as i was about to begin. He said, daschle, i have a question that he had obviously been at the bar most of the day. I could tell that. [laughter] just by the way he started his question. He said tell me, daschle, what is the real difference between a democrat and a republican . I was a little impatient by the question, and adjusted sure, when youre sober ill give you an answer to that question. He said, daschle, when im sober i dont give a damn. [laughter] well, the truth is that we shouldnt care. Agriculture is in democratic, republican. Its not partisan at all. Rather than divide us, it should unite us. As a look over this tremendous crowd, ic unity among all of you. I see unity among all of you. In south dakota we have a special term, we just called them issues. I was very fortunate to spend 30 years on these issues in congress, attempting to put Rural America<\/a>s agenda on the national agenda. And almost every day i left the senate, since i left the senate im reminded that agricultural issues, Food Security<\/a> issues dont stop, as tom said just now so powerfully, at the prairies edge. These are national issues. They are global issues. Today, farming and Food Security<\/a> are beginning to receive the attention they deserve. President obama has launched a new alliance for Food Security<\/a> 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. Their grand parents ranches, farmers are having their own their own Online Dating<\/a> service. And the most talked about super bowl commercial, courtesy of the late paul harvey, was dodge rams heartwarming tribute to the american farmer. Him whats that Kenny Chesney<\/a> song . She thinks my tractors sexy . You know, theres some truth to that. Agricultural issues are, i would argue, sexy. If not sexy, increasingly critical and increasingly important. So im glad to be here and its metaphorically appropriate that we are here today, because it turns out it was february 21, 1865, 148 years","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600202.us.archive.org\/18\/items\/CSPAN2_20130226_110000_Today_in_Washington\/CSPAN2_20130226_110000_Today_in_Washington.thumbs\/CSPAN2_20130226_110000_Today_in_Washington_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240617T12:35:10+00:00"}