SENATE AG COMMITTEE CHAIRMAN ROBERTS' ADDRESS TO KC FED'S 2017 AG SYMPOSIUM
Jun. 19, 2017
Source: Senate Committee on Agriculture, Nutrition, and Forestry news release
U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, today addressed the 2017 Ag Symposium held by the Federal Reserve Bank of Kansas City.
Chairman Roberts discussed agriculture policy priorities for the 115th Congress and gave an update on the Committee's work on the upcoming Farm Bill.
Chairman Roberts' remarks as prepared for delivery are below:
Thank you for that kind introduction and for inviting me to speak with you today.
I am struck by one sentence describing this symposium- this "reduction in prices and profits has led farm producers, agribusinesses, and agricultural lenders to consider fundamental changes to their business models to maintain competitiveness, improve efficiency, and position their businesses for long-term growth."
The agriculture sector needs a government that helps maintain the competitiveness of the commodities that are grown by seeking out new and emerging markets; a federal partner that helps improve efficiencies by rolling back costly regulations; and one that helps agricultural, rural, and farm and ranch businesses plan for long-term growth by providing a permanent tax code, as well as providing producers with the tools needed to manage market uncertainties.
At a time when the agricultural economy is in a period of adjustment, it is important that the role of government be a partner, not an adversary, to farmers and ranchers.
As Chairman of the Senate Committee on Agriculture, Nutrition & Forestry, my main task is to work on behalf of farmers, ranchers, and other rural stakeholders across the country.
As I said when I first became Chairman of the Agriculture Committee, I will listen to farmers and ranchers first, and I have no plans on changing this approach as we move forward with the next Farm Bill.
In February, I held the first Senate Farm Bill field hearing in Manhattan, Kansas followed by a field hearing in Michigan last month.
During these hearings, and other travels to farm country, I have listened to farmers, ranchers, and many others in rural America regarding what's working, what's not working, and what needs to be improved from the 2014 Farm Bill.
We also held a hearing in Washington that looked at the economic conditions that policy makers in agriculture must adjust to this Congress.
From these listening sessions, one thing is clear - times are challenging right now in farm country.
When the 2014 Farm Bill was written and passed, times were relatively good in agriculture. But, as everyone should know, a lot has changed since then.
At that time, net farm income was at record highs. In the years since, the farm sector is expected to face a 50 percent decline in net farm income.
Low commodity prices are weighing on farm sector profits for both row-crop and livestock producers. Crop receipts are expected to decline by over $42 billion and livestock receipts by over $23 billion.
On the credit front, reduced farm income over the past four years has continued to weaken credit conditions in the agricultural sector. Tight profit margins and ongoing cash flow shortages are increasing the demand for loans and creating decline in repayment rates.
Producers are expending more working capital to meet short-term obligations. Many farmers are becoming more leveraged as working capital is decreasing while debt levels continue to rise.
The trend in farm country is clear. But, during these tough times in the agricultural economy, what's needed is certainty, bold thinking, and new ideas that address today's and tomorrow's challenges.
First, we need to ensure that producers have risk management tools at their disposal - let me emphasize that crop insurance is, for many, the most valuable tool in the risk management toolbox.
During visits, producers from across Kansas, Michigan, Montana, and nearly everywhere in between have emphasized the importance of crop insurance and other risk management tools as they navigate through a struggling farm economy.
In 2015, I worked overtime to reinstate a $3 billion cut to crop insurance during the budget process.
However, the work is not done. As we move forward with the Farm Bill, there will be outside groups and members of Congress looking to gut the crop insurance program and cut billions of dollars in the name of "reform."
Time and time again, agriculture has been asked to do more with less. I would remind these "reform" advocates, that the last Farm Bill voluntarily cut spending.
And, the previous crop insurance contract negotiation at USDA cut $6 billion from the program on top of a $6 billion reduction in the 2008 Farm Bill.
As I remind my Senate colleagues, crop insurance is bought and used by farmers and ranchers from all 50 states, and protects their business operations from an unforeseen loss. Over 290 million acres from all 50 states, ranging from conventional crops to specialty crops, were insured by a crop insurance product in 2016.
Farmers, ranchers, and rural families understand fiscal responsibility. But, now is not the time for additional cuts to a program that producers rely on as a risk management foundation.
Second, we need to find ways to reduce regulatory burdens that hurt producers' bottom lines.
Producers are not only at the mercy of the weather, but they also face challenges with burdensome regulations that affect and impact their production and the cost of doing business.
After eight years of wondering what costly government mandate would be announced next, it is nice to have an Administration that is fighting back on over-regulation.
I am glad to have a President that is taking an active role at providing regulatory relief to all sorts of burdens on farmers, ranchers, businesses, and other Americans.
At USDA, Secretary Perdue has certainly hit the ground running. It has been just shy of two short months since the Senate confirmed the Secretary, and he has demonstrated a strong understanding of the issues facing agriculture and rural America. I am confident he will continue to put producers, food manufacturers, and the communities in which they live, first.
I'm looking forward to working closely with the President, Secretary Perdue, and others in the Administration to take a common sense approach to regulation that benefits rural America.
Finally, we need to strengthen our export markets for not only the things that we make, but also for the commodities that we grow.
The Secretary has moved rapidly to elevate the importance of trade. He is moving forward with the creation of the Trade Under Secretary position, which was directed in the last Farm Bill but unfortunately not implemented under the previous Administration.
At a time when the agriculture economy is in a rough patch, farmers and ranchers more than ever depend on trade that will increase demand for their commodities.
USDA estimates that each $1 of U.S. farm exports produces an additional $1.27 in economic activity, and every billion dollars in agricultural sales overseas supports about 8,000 American jobs. It's clear that agricultural trade not only benefits the agricultural economy, but it also benefits the entire U.S. economy as a whole.
We must continue to focus on expanding market access through negotiated agreements, starting with countries, including Japan, and enforcement of existing trade agreements and laws.
I was encouraged to see the news on the agreement made with China to allow U.S. beef access to nearly 1.4 billion Chinese customers and understand that implementation of the agreement is progressing well.
The importance of trade and the role it has in the agricultural economy cannot be emphasized enough. We need a strong trade policy in place, and I am ready to work with the new Administration to make sure that our producers and businesses have the level playing field that they need to compete in the global market.
All of us understand that going into this Farm Bill, we are facing tough and critical times. The challenges are great, but the opportunities are boundless.
Our farmers and ranchers grow the safest, the most reliable, and the most affordable food supply in the global marketplace. It is essential that small differences do not get in the way of the larger goal - and that's to pass a Farm Bill.
At the same time, our government is spending money it doesn't have. Our national debt is approaching $20 trillion.
We are going to have to be judicious with scarce resources. We must ensure programs accomplish their fundamental purposes. We must ask tough questions and reexamine programs to determine their effectiveness.