Agriculture in Transition; Governor's Conference - Branstad; 2.0

For the last 12 years. Today we get it from places like Venezuela and Mexico and the north say but we only get 5 percent of it from the Persian Gulf. We haven't made a lot of noise about it but very quietly but very correctly we made a decision that we can't allow America's lifeblood in terms of fossil fuels or petroleum products to rely on what's going on with the craziness that currently takes place in the Middle East. So I'd put it embargo on beef and a year later in 1074 I'd put an embargo on soybeans and wheat when the price of bread jumped a quarter Olof. And I tinker around with the nations that were our sole purchasers or I should say we were their sole supplier in foreign agricultural commodities like soybeans and wait. And then a few years later because of anger on America's foreign policy with respect to a Soviet f invasion afghan of Afghanistan I put another embargo on. I keep reminding the world every few years that

notwithstanding what we say politically we can and will be an unreliable supplier if we perceive it in our political in our food or our foreign policy or national defense interests. It's an amazing thing that nobody embargoed Chrysler automobiles to the Soviet Union in 1909 and they did embargo refrigerators are hard Shafter and Mark suits either or Coca-Cola the new Coke or the old Coke. They didn't stop either one of them. What they embargo was American technology and American food in terms of growth in those markets. And then I'd sit down and I decide how to send false signals from the government to confuse people. Not that any of us should have ever been so dumb that we ever believe the government in the first place but we did and I'd send out a guy named Earl Butz and have him transferred travel hither and yon around this country and say look the world markets are exploding there's a hungry world out there they need our food.

Tear up the fence rows and groan from ditch to ditch or fence row to fence row and get that stuff planted and tear up that soil and grow those commodities because God knows we can sell them for you on the world markets. And that I hope that the people were dumb enough to listen to me. And there's nothing like $6 wheat to do funny things to all of our heads in agriculture. And we did just what we were told to do. And then I come in a few years later and I had completely changed signals I'd come in as John said with a pick program. So I don't plan anything and if you do we'll dump all this stuff on you. We don't care what the consequences are to the fertilizer dealer in town. We don't care what the consequences are to the seed dealer in the feed dealer and the other people in town. After all what's a small rural community got to do with farming. We know there is no such thing in America. So I'd start sending you confusing signals from Washington. And then the next thing I do is guarantee unlike every other business aspect of America you would never have a long range policy.

If I go out as a businessman today and I make a decision to build a new factory I know today exactly what my investment credit will be over how many years if I rehabilitate a historical structure. If I make a decision to build something I know what I can look at in terms of double declining balance hundred fifty percent of the single line rate I can look at straight line depreciation I can look at ACARS a set of accelerated cost recovery system I can look at all these things and see them out into the future and I can plan my pro formers I can plan my cash flows and I can put together some kind of projections but I never allow that for farming. I keep it a secret from year to year what our Tigard prices are going to be and I keep it a secret from year to year what our set asides are going to be. And I'd never pass a program that lasted longer than four five years because if the agricultural community in rural America had some kind of predictability they're liable to be able to deal with it. So I wouldn't do any of that.

And then I'd make sure that although we gave lip service to the development of the West I stopped the reclamation programs and water development throughout the entire West. I'd make sure that I spent more money on building the subway in Washington D.C. that has been spent in the history of the West on reclamation projects because God knows nobody in Congress wants to live in Washington D.C. They've got to get out to Maryland. They've got to get out to Virginia and they've got to get to these other places so they can tell you how tough it is living back there. But they want to do it on a new subway. But I'd make sure that we put more money into Subway Development in Washington D.C. than I ever put in a water development in the West. Oh and then I'd go find Jane Fonda The fan of everybody in America. Well no change fine if she was crying on television for all of us last week but for the last 12 years she's been running around everybody in America stay and say away from red meat it will kill you. And don't eat pork and don't need beef and don't eat any cereals that have

been treated with herbicides insecticides fertilisers. Well we've got to have his organic farming and be pollination and anything else is going to kill you. And then when she's finally been ultimately successful. Well at that point I'd bring her in before the national television cameras as a movie star hauler and before Congress clock her down at a table and have her have tears run down her cheeks and wishing for the rural people of America and the farmers that she's only worked for 12 years to put out of business. Matter fact she hasn't been all that successful Usually she can accomplish your objective in weeks. It only takes her two months to make a movie. But I'd make sure that she switch signals on us and then not engage in a decade 10 12 years of what we call expansion. I'd tell farmers your future lies in being capital intensive. God knows labor intensive won't work. That won't be successful.

The only way you're going to be able to make it in competing out of that world markets is to invest more and more in the capital aspect of your business as opposed to the labor aspect of your business. Because we know to invest in capital costs money. To invest in assets cost money. And so one of the things that we have to do in order to increase your borrowing power is to give you some inflation because after all we have to run up the value of your land so you can borrow against it. So I give you a mega billion dollar deficits and boy I do a hell of a job with that I'd preach fiscal responsibility every political speech I ever made. I'd tell you about the sanity of a balanced budget. But God knows I'd never vote for one. Have you ever met a politician in either party that had the courage to come before you and say look I love deficits. I think it's the only way to go. That's what our country needs is good old fashioned inflation. That's what's going to solve our problem. No they're all for balanced budgets and old people and education and transportation and farmers and city folks.

They're for everything but responsibility. That they're not very successful with. When I pass a farm bill in 1985 knowing full well the president was going to veto it and the crazy reason he gave is still dumbfounding me and I'm usually not surprised by most of the stuff I've told you. I've been around the government for 10 years. But I'm dumbfounded at the reason that he gave. The primary reason that he gave is we can't loan money to people anymore who can't show that they can cash flow their operation. Why if they can't show that they're going to cash flow then we can't loan them the money. What the hell does he think his government's doing to the tune of 200 billion dollars a year that's what I want to know. He doesn't cash flow very well and neither do the AMA Congress. Going Off you go take the total of the whole state revenues raised by Kansas John Carlin state and throw in Terry Branstad and

throw it out a mile from South Dakota and you go through all 50 states in the union all 50 states and you take the total amount of money that's raised this year in taxes from their people for state purposes. And it won't equal the national deficit not the debt but the deficit for this year. And we in America should start the same policy we should start vetoing for the same reasons that they veto when Washington and tell them if they can't figure out how to cash flow back there we're not loaning them any more money either. And they're going to have to be as responsible as we are. And then in addition of that I'd move on. I'd make sure that our deficits contributed to a high dollar. Because after all with all these things I've visited on rural America they might still be able to make it. You know they're ingenious those fools out there and they're liable to make it so I'd make sure that the dollar was at least 20 30 40 and in some

instances 50 percent overpriced on world markets. Which you can do with deficit's if you know half the debt in this country the national debt in this country is purchased by foreigners. Of the two hundred billion debt will run this year 100 billion of it will be bought by people in Japan and France and Germany and England and a whole host of other countries. And every dollar that they spend it send to buy our national debt is a dollar they don't have to buy our pork and our beef and our wheat and our soybeans and our corn and our cars and our television sets and our suits and everything else and we in America sit around in anguish about the debt in Mexico and the debt of Brazil on the debt of Argentina. You can take the whole debt of Brazil. All right should say the hold at a Mexico all 80 billion dollars and the debt that America will have by 1989 to foreigners is 10 times that great. We will owe eight hundred billion dollars to foreigners and one thing we've learned out in rural America is how auctions work and we

know that when you have to have an auction the one thing you really want are a lot of betters and the less bidders there are the less the commodity or the product is going to sell for. And the government figured that out a long ago too and there's always been one person in the community that had more money than anybody else or what we called more back in than anybody else and they could outbid everyone. And in America we call that the national government. After all they get to come take it from you. So they're bidding against your for that money in the marketplace and then they're dumbfounded when we have 14 15 16 and 20 percent interest rates. Lord knows they can't figure out where it's coming from. Yet every time anybody wants to borrow money they're there first to get their share and then they wonder why rates go up for those of us that are left scrambling for the few dollars because one thing rural America figured out a long time ago was supply and demand and their yields and their curves and in addition to that I'd lament if I

was in the federal government I wouldn't do anything about it but I would lament about all these foreign protectionist and subsidy aspects. In world trade I'd sit and complain year after year after year after year about the European Economic Community which this year is spending 28 billion E.C. U.S Economic Community units that are pegged at 80 percent of the dollar for agriculture. Eighteen billion of which are being used for subsidies to compete with American products on the world market. If you want to see something will make us sick not that you haven't already over the last couple of years you want look at the amount of oats that's being imported into the United States from Sweden. Go look at the amount of pork that's coming in from Denmark. In places like Canada Go look at a situation like Argentina where if you don't think Argentines are competitive now wait till you figure out that the Argentines have a 25 percent export tax on agriculture commodities. In order for an

Argentine farmer to export out of his country's got to pay 25 percent of its value to the government in attacks. And yet right as I stand here and talk you can go down to Argentina and buy wheat and you can put it on a boat you can ship it to New Orleans. Twenty four cents a bushel cheaper than you can buy it at Sioux City Iowa and put it on a barge and floated down to New Orleans and then we wonder what's happening to our world markets. And then another thing that I do if I wanted to make sure that I destroyed agriculture in America. Is I'd make sure that we used America's best technology and best minds and best talent to go teach the entire world how to grow all this stuff and how to raise it all. It wouldn't teach him anything about nutrition. What I teach him do is how to compete with us in all of these aspects and at the same time I would make sure that if we want to preserve things like the democracies in Brazil that what we perceive to be the democracies in

Argentina what we perceive to be the democracies of some of these other countries that have soft currencies as a national foreign policy consideration a national defense consideration. God knows our government can't do it so I let our farmers pay for it by good law allowing them to peg their currencies are what are known as the soft currencies. Against the dollar. The yen the mark the pound the dollar they all float against each other. But the soft currency countries the peso countries the Corsair all countries they've set an official rate of exchange so they don't have to worry about where they set visa via the dollar. And then I'd start making sure. That we outlawed various types of things and maybe for very legitimate reasons like coral Phina call and some of the other antibiotics that we put into our meat industry. But God forbid that I'd ever make sure that our competitors had to do the same thing even for the meat that they shipped into the United

States. And then I get the United States Department of Agriculture when somebody on the state level or I should say several somebodies on the state level do something about it I get our United States Department of Agriculture and our secretary of agriculture to lament the woes of well we understand their frustration out there in the States. But we wish they'd let the national government do it. The last thing we ever should have done in this country to let the national government do is declare war after Pearl Harbor was attacked. Since then they've had to debate everything for weeks days months and years. Why don't you Farmer some time started debate in February and debate as long as Congress does the farm bill before you plant a crop. And see how well you do in the fog. And then I'd make sure the Congress reach gridlock. That's pretty hard to do because when you talk to those people in the house in the Senate they got you believe and they're working like hell all the time. So the first thing I do is take a hundred U.S. senators and I'd create one thousand one hundred fifty

four committees and subcommittees in the U.S. Senate. Now that ought to keep them all busy so they can't get anything done. And then I go over to the House of Representatives and then I break it down to committee and subcommittee to the point where you can go into the house and just the agriculture subcommittees in the house are the conservation credit and rural development that's one subcommittee. Cotton rice and sugar is another subcommittee on agriculture forests family farms an energy boy they all go to where they gather don't they that's another subcommittee livestock dairy and poultry is another subcommittee tobacco one peanuts or another subcommittee wheat soybeans and feed grains or another subcommittee. And then I'd come home and see I can't figure out why we can't get anything done in Congress it's amazing. Every time we talk about a Corn Bill the hog farmers don't like it. And every talk time we talk about soybeans the beef people don't like it. Why you guys in agriculture just have to get together. Like we are in the House of Representatives. Why how can we ever do anything if you folks don't all get

together and come up with a solution to your problem. And then in addition to that I would start talking about the market system. Because John said in his remarks I would then say why none of these things should be problems for the farmers. We had to put them on the market system. Why we all know that by God it's free enterprise that made this country great. Free enterprise with an embargo here and an embargo there. So I was to sit down to write a whole new set of tunes the Old MacDonald's farm. But the bottom line is would all end up in Washington and their ineptness and their incompetence. And I guess what I'm trying to say is I try and be just a little bit cute as I say at. What I'm trying to say is there hasn't been for 50 years. There isn't today and there's never going to be a market system to deal with these types of problems. American agriculture is a tool of our national defense policy and

that's fine. American agriculture is a tool of our foreign policy considerations and that's fine. But you know we got another kind of concept in America it's called the due process clause of the U.S. Constitution and it's unique in the world. And the due process clause is something you know you know it says it says in America the government can take your life away. They kill you. They can take your liberty away in this country. And they can take your property away. But our Constitution says you can't be deprived of your life or your liberty or your property. Without due process of law. And when the government comes in by its official actions and creates a mess assuming that I'm accurate in what I've just described to you. Then does it have any responsibility. Not under a constitutional lawsuit but under a precept that goes all the way back to our founding fathers when they sat down and wrote the Bill of Rights in the Fifth Amendment.

Do they have any due process responsibility. To the people if they caused injury to. If I back out of this intersection driving away from it and I run into a parked car do I have a responsibility to those people. Or is it their fault to park where I might drive. And do I have a responsibility to make them home. And to straighten out the problems that I've created I know we talk about we give lip service to the market system today but in our hearts there aren't any of those people in Washington that believe it. There aren't any of those people in Washington that think it will work. And there aren't any of that even know that it will work. You know I just spent four days in Japan last week trying to help sell American beef and pork. I sat in a country that's got 300000 inefficient cattle producers. And they admit they're inefficient. They also happen to be the

backbone of the government that's in power. And so nobody's going to mess with them. And I sat down and met with officials that were with a group called the El IPC which means the livestock improvement production corporation. Nice title. Except the ally PC's responsibility is to determine how much red meat. Beef pork comes in from other countries allowed to be imported into Japan and at what price will the duties be. And the amazing amazing thing about it is they were sitting explaining to me how this is a unique private corporation where they make private business decisions based exclusively on economics for Japan and so I said to Mr. Mori the gentleman who is the president of the ally PC. I said well who are your shareholders who owns all the stock in this corporation. He said the Japanese government. Well maybe it's time we started

setting up some of those private corporations in America. Where the stock is owned by the government. And I said what we really ought to do in America is maybe we ought to set up a thing called the e IPC. Which means electronic industry production corporation and start applying the same standards or take the barriers down. And the biggest complaint that I have of all is with these types of things that I've described to you. Are farmers up and tell basically the last 24 months have still been able to hold their own. I haven't even talked about hail or floods or droughts or a whole host of other things. All I've talked about is government action where we've manical their feet and we've manacled their hands and we've found their bodies in a strapping that Houdini couldn't get out of. And they've still been basically able to hold their own till the last 18 months to

24 months. What can the American farmers whip the national treasury of France. Can they whip the national treasury of Argentina or Canada or Brazil or Argentina or you know Zealand. We know the answer to that question. Can you who are hog producers out produce any other producer in the world and hogs. Can you produce a better hawg with a better genetic strain with better mate with better weight with better quality points Can you were and beef do the same thing. Can we grow more corn or more weed or more store beans or more sorghum or more rice or more anything more prolifically and with better quality than anybody else. But can we beat their national treasuries in the process. The answer is obviously no. A year ago December and I'm going to close with this a year ago December I was in the nation of China for three weeks the Republic of China. I had the rare privilege of being in the first group of governors to be invited to go to China since 1949.

I was in a nation that has eight hundred million farmers. Just put that in your pipe and smoke it some time. Eight hundred million farmers almost four times the population of the whole United States of America are farmers in China. You want to know what social unrest is. Wait till they mechanized that agriculture community. And figure out what they're going to do with 600 million spare people. And I was in a country that had 800 million that produces substantially less than we do with two point four million farmers and of those 2.4 million farmers 1.7 million of them all but 700000. Make a hundred and five percent of their family income. From non farm activities. And I said how can you make a hundred five percent of your income on anything. They said that's the difference between what they're losing on farm and what they're making on their

other job and that's 1.7 million. So we've got about 700000 farmers out of 2.4 million that are making it by the standards that we all currently have to live. So you know when a guy goes out of business he's just one farmer that's all just a farmer. We lost a farmer today. Nobody gets too upset today. But tomorrow it's one more farmer and the day after rich two more farmers and then two weeks later it's another farmer or two and then all of a sudden we just lost a business. Man and it's Bergamot. Her and Salinas Kansas. You are an Eagle Butte South Dakota. And it's just one empty building on Main Street but then we lose another farmer. And another one and another one. And then we got to have another business go. Because after all that's what they used to do their shopping.

So now we got another empty store on Main Street and pretty soon you have enough empty stores on Main Street the bank closes. After all the community is not economically viable anymore. And then you've got a couple more farmers you lose and I'm not dealing with big numbers I'm just dealing with Want to time. And then a short while later you lose another business and pretty soon they can afford to run the little old country small community schools anymore. So we have to close the school and merge it with another community. When the final thing to shut down in most of our rural communities the Community Church. When they go merge that with a neighboring community. And then our historians are going to sit around 10 and 15 or 20 years from now. Say nobody understands what the hell ever happened to America's rural community. But it disappeared. And the one word of caution that I give is to those of you who are making it today because you don't have debt. You're not very lucky. Because you're going to

end up with a viable economic enterprise and no neighbors. You're going to have a viable economic enterprise and no friends. And you can end up with a viable economic enterprise and only have to drive 200 miles to the nearest implement dealer to get parts when you're breakdown. And you can do your church services on satellite television. Don't worry about getting mail through the post office. As a matter of fact you probably never got it when you had a post office. But you don't have to worry about that either. And of course there won't be any tax base Leslie left in your counties to plow there were snow in the winter time. So just hold up with your provisions for the winter. And rural fire protection could be you and the rest of the family with what you can haul in the back of a pickup. Oh it's going to be an exciting way of life. That the survivors are going to have when you're through. With a thing that isn't the road that we're currently headed. It's called American agriculture

in transition. Thank you. Ah I'd like to to thank Governor Branstad Carlin Janklow for the very enlightening remarks remarks that really framed this conference to put the kinds of things that we're trying to do over the next couple days into perspective. We will be taking a very short break. I would ask that if you do come and go into the room that you do so quietly following that break the next session will be chaired by James again an editor from The Des Moines Register along with a panel of six persons that will ask the governor's questions. If you if you do want to come and go please I would ask that you please be as quiet as possible.

So with that we will take a very short five minute break. With that the statements of the governors are concluded in a few moments questioned by members of a panel that will include a journalist a commodity analyst a spokesman for a grassroots farm organization and a baker. In a moment we're going to speaking with some of the participants of the conference. One thing right here right. Let me get. My question. Thank you for joining us. Everybody. Looking back at the past and how we ended up where we are and the hope for a better future. In the next two days two and a half days what this conference says. What do you hope to see come out of it. In practical terms what sort of follow up activities or

anything like that sort of thing. First I think we need to understand how we got to the place we are today. We know we're going through a crisis and agriculture is a major transition going on in the American economy and agriculture has been as hard hit as any industry. And we need to understand the impact in the in a relationship between the farmer the farm family and the community the church how it all in a relate to now it's all tied together in how what's happening in agriculture is impacting the entire American economy. And then secondly we need to decide how we can make the transition how we individually is. Individuals families as farmers as businesses as communities can deal with how we individually a States can deal with it and how collectively we as states can work together to impact in the change. Federal policies that have had such a major played such a major part in the problems that we're faced with today. I think there's a clear consensus among the governors that we need a more long range agricultural policy and that we need to change the policies that have

caused these huge deficits and and this overvalued dollar that's so negatively impacting it. Do you think some of the real work of this conference is going to come out of the workshops with the people who attend those go home and do it. Yes I really think that it is a very broad based group and we have all kinds of groups and organizations represented here what we hope to do is have a very thorough discussion of all the issues and alternatives and hopefully from those discussions people will be able to glean their own ideas of things that they can do back in their own communities as well as working together to try to implement changes in national policies. You talked about still needing I'm not fond of the stove but really anything that can be done during the transition. It doesn't take money. Yes there is things that can be done. We see this happening in communities and that's I think the great thing about rural America is the neighborliness the fact that when somebody is having a problem that somebody just comes over and say I understand what you're going through and show some sympathy and understanding and willingness to help. And sometimes it's just a helping hand and a word of

encouragement can really make a difference when somebody is down. Also I think that oftentimes when there is a tragedy where there is a problem people can band together and they can look for new opportunities for a new industry to a community so that somebody doesn't have to move away. Maybe they can continue in farming but they can still live on the farm and maybe work off the farm as was stated. A lot of our farmers today are getting most of their income from off the farm and that's how they're able to manage it. Except it has more small part time farmers off farm income as it is expected. This is something that's going to have to happen in the near future. It's a very capital intensive industry and the cost of the debt of getting into this huge equipment is just killing so many of our farmers that I think the only realistic alternative is to look at working a lot of our people are already doing this and it's true in many other states where you work part time

and then farm part time and it may be that that might be a transition to going back into your culture but is absolutely essential to be able to make this transition. OK thank you very much. That was Governor Branstad post official host of the conference. Now I turn to the side switch hands again and this is Tom Slater who is the chief organizer for this conference right. That's right right. To perceive as the goal of this conference when you set it up I think basically I was concerned about bringing together a broad diverse group of policymakers to come together in the state of Ohio if you will from a national point of view to talk about agriculture in transition. What we can do as far as immediate response a long term was the fact that we have raised the consciousness level of America about a crisis I think is very important but now we're at a

point where we need to look at policy and what states can do to address these issues so that much States can do given that federal farm programs federal tax policy and federal fiscal policy. Well I think there's there's not a way I think states can do this thing that states have to do because you know the federal government aren't going on. They're not going to say if for instance they're not going to deal with some of the immediate human resource responses as far as what is going to happen to the farmer in transition the dislocated farmer or even some of the financial or credit situations the states are starting to do those kinds of things they are addressing it and they are. Of Rural Development small community development there are programs that are being developed. States are doing and I think I think that's that is something the states can do. I think what we see here and this is good for the next three days are that broad cross-section of policy makers are coming together to try to further his realistic but what can we do

with things obviously bother the federal government is going to do. I think it's important not to put down these major speeches but most of what the governor said. Everybody knows I mean they're preaching to the converted here may be the case in some of your other major speeches during the conference. Would you send it to real cuts to real work being done here is going to come out of the workshops. You know Governor Janklow said it you know it's kind of like preaching requirement. But what I think we heard in the last three speeches by the governors is a situation in which the governor should frame this cause as we heard about the impact on the family I mean you can't I mean you heard some chastising about federal programs for Governor Janklow was going to be a lot of hard work and we're going to do the work because we have a number of people from all over the country and from I was going to talk about specifics. And on Friday we like to think that is the day we wrap things up and that is the time that we look at what is going to happen the future and we think it's a pretty well structure that will be that way. That's what you just wrote.

You've already mentioned this in the past. This was a this is a conference on transition not a crisis that's already been dealt with. It's from what I know the first major conference addressing transition out in the heartland. Even the speakers talked about the federal government and the role they play for some of the focus that it's a local regional or else I think you know if you look at the flows that we talk about diversifying the really gonna me diversifying our agricultural base looking at the economic development of small communities what states can do in international trade. Those are the kind of things that we can address. And even though you know the governors talk about a broad range of broad perspective what we're doing are trying to do is to is to try to share some of those things I think is very important I think that states do have a responsibility to do this. There's been lots of conferences in

Washington there's been lots of agricultural conferences. We'd like to think that it's time to start dealing with the you know affecting public policy and this is a pretty good start to small start. It's kept from me kept me. Who are the people attending this conference where they from what sort of things that they do and where do they go back to when we have a real broad cross-section is something we try to get in panelists and attendees. We have representatives from 27 28 states the District of Columbia from Maine to Hawaii. They represent governments all aspects of policy makers from religions to schools to governments to business to community based organizations we feel that all of those groups have constituencies and clientele groups and they represent people that can effect change. They can come here and try to develop some kind of a process a networking system that we can start the process of developing policy issues on a state level. And one of the goals was to bring together a lot of diverse groups right.

And I think we were successful in saying we talk about the main stream of policy makers the stream of this conference is very wide. Let me ask you one sort of off the wall last question. I didn't. Live. Survive whatever during the 1930s the depression and in the Midwest and want to get tired of culture. My assumption is that when that was going on you heard the same sort of rhetoric. And yet when I moved here 15 years ago the aisle economy was OK. Agricultural economy was fine. There is something on the other side of this. Well yeah I think if you want to look at history do you think it is worse now. Is there more than a telephone. Well I think that our way of life is at stake and I think that's important. But but that transition period was addressed by the federal this transition time will be partially addressed by the federal government I don't think we should expect to look to the federal government at this point to solve all the problems coming back to local areas.

Yeah I would think that that part of it. OK thank you very much. And next we're going to be talking with Joan Wilson with the National Governors Association. I don't thank you for joining us and your role in preparing for this conference. Free full responsibility to identify with the conference and then define what we consider to be the states are taking. The most initiatives to bring in terms of whether it's a short term credit or some of the programs for a real economic development bring those people in from all the states. So we're basically the networker and broker people. That's not necessarily a very exciting activity but hopefully a very important part of the activity we would do. Yes we do.

Things that we here take the material back from the hand and give it to our committee to influence policy on the Hill. Is that an important aspect to taking it back to Washington. Yes I think as important as what all these people back to their accommodation hopefully people will learn from each other here and talk to each other. Secondly one of the things that we find very interesting and one culture crisis is it is in fact impacting and affecting so many parts of government our human resource programs are affected in a much more significant way. Thank you I have been in the past that has impact programs welfare programs heart wasn't going to grow for the first time where farmers are applying for assistance. But for the federal government sharing my information of

the destruction the governor's government programs and policies are so profound in the fact that I have a culture governor was really able to go as can essentially be brokers. Each of the three governors mentioned that they would not be there to support any one of the special interests. They had to have responsibility to think through all the systems and pieces fit together. I think it's probably a role responsibility of governors and frankly almost no one else. So I tell you that the pieces together they don't represent a special. They represent the chief executive officers of states which is somewhat different. This is a question that's sort of my own profession. Is the press

coverage as important as what the people in the workshops what your people do with what you come out of it taken start disseminating to other folks back at home. I would like to say that being here is very important. We really appreciate it. What really matters in two to three years down the road when the press is going to say is have we changed the way we do business to deliver services to people. And that in many ways people from the churches to talk with us in terms of people with the State Government them all sharing information and working with each other is to your liking and that's time consuming. Probably if you very much for About to go back to the panel. OK the break is now over and I'm going to rejoin the conference as a palace of governors questions about the future of agriculture. The gentlemen at the podium is Jim Gannon with me today

are a number of panelists with various perspectives on agriculture that I would like to introduce first and we will quickly get to the questioning of the three governors with us first. Wendell Weldon Barton agricultural representative for the independent Bankers Association of America. He is a former assistant secretary of agriculture in the Carter administration and a former Washington lobbyist for the National Farmers Union. Next. Chuck Gifford who is director of The Des Moines regional office of the United Auto Workers Union. Next Marlon Groot a livestock and grain farmer here in Iowa and chairman of the International Foundation for agricultural development. Douglas Jackson is a former Iowa farm boy who became a grain merchant. He's vice president of the farmers commodities Corporation which is a subsidiary of Agri industries of West Des Moines Iowa. And finally David L. Austin

Dorf who is an ordained minister in the United Church of Christ and an advocate for rural interests. He is director of an organization known as Perri fire which is based in Des Moines and is committed to rural organizing. I'll get to the panel in the moment I would like to begin the questioning myself. Governors We've heard various descriptions of you in your remarks in the state of Iowa of agriculture in the country. Governor Branstad told us that we weren't that the reports of the death of Agriculture were greatly exaggerated and we're not here for a funeral. And by the time I got through listening to Governor Janklow I was pretty well ready to hang the crepe. So I think we have a difference of views or at least emphasis. We've talked we've heard a good deal of the description of the problem and its consequences from you. I think the task before the nation and perhaps this conference today is to talk concretely of steps to take now and solutions that ought to be taken on both the national level

and on the state level some of you have referred to some of those. I'd like to turn to Governor Branstad first. You were rather sharply critical governor of some of the program and policy suggestions from the Reagan administration. Can you tell us specifically what you as the governor of Iowa want to see in the farm bill that Congress must write in this session. First of all I think we all recognize that the federal deficit is to a great degree intertwined with the problems of Agriculture. We're very concerned that the Reagan administration is requiring too much of the federal deficit to be carried by agriculture and related industries. And I support an across the board freeze in the federal budget including a freeze in spending for agriculture and I believe that the price support and long rates and target prices should be retained at present levels not

increase but certainly not drastically reduced to drastically reduce those those target prices and loan rates at this time would further cause a deterioration in asset values and make this crisis continue to worsen. On the other hand retaining the system in place for the next couple of years I think would help stabilize the situation and hopefully if we get. Better crops and we have recently. We could begin to see things improve. We then the national governors have gone on record for a longer range agricultural policy and have suggested a national bipartisan commission be put together to fashion what that policy should be in the long range. Well we continue the present system in place in the short range it's a little approach. It doesn't take the total market approach of the Reagan administration proposes nor does it go to a heavily subsidized proposal like Senator Harkin and others have recommended. It takes more of a middle approach. You are opposed to the

kind of so-called populist farm bill that would call for a very strong mandatory controls on production and high levels of price supports such as Senator Harkin suggested that that right merely because it's unrealistic to expect the federal government to pump billions of additional dollars into agriculture in light of the present fiscal problems on a national level I don't think that's realistic at all. And on the other hand I think the president's proposal would totally phase out the price support system also would be devastating and they have a better chance of passage but the impact on the heartland of this country would be absolutely devastating. We can't let that happen. And so I'm hoping we can end up with a more middle ground which would retain him. The price the target price is in and loan rates gap or near present levels to help stabilize the situation near term as we then work for a more long range thoughtful approach towards agriculture that could restore profitability.

I'd like to ask governors Carlen and Janko to comment on that last question specifically and briefly do either one of you favor these sort of so-called populist barbell approach with strong mandatory controls and high price support levels. Governor CONNALLY. More than anything else I want him to decide what is going to be and stick with it. I would prefer a middle of the road approach because I think over the long range it's the more likely one to succeed if you tried really it establishes a stable foreign policy if it gets too costly there are going to be those economic pressures political pressures to reduce the program the free market won't work we've discussed that so staying somewhere in the middle I think has more potential to survive and what the farmer has to have and what his cover Janklow said earlier. We got to know a little bit about what the rules are going to be. We've survived a lot. If we could just decide what the program's going to be. I've had many a farmer tell me even if they decided it was a and concluded that a bad program would be better than what we have today of going back and forth because they give a farmer the last 10 years of know what was going to come.

And I've been stable consistent regardless how bad it was the farmer probably could've figured out a way to adjust in Surat Governor-General but you know I'm going to duck your question just a little because I think it belies the underlying problem and that is 40 percent of what we produce in America we can't eat here because we have overproduction. But our problem is because we can no long we didn't have a reduction in 73 74 75 76 77. But our problem now is the rest of the world has gotten into farming in a very substantial way and is able to compete with US effectively because of this damn deficit and that's what's doing it when the dollar 1082 a German could buy a bushel of soybeans for 10 March today that same bushel cost him eighteen marks it's an 80 percent increase from what it was just three short years ago. What's that doing that's encouraging Brazil to grow soybeans and the problem is all these countries that are now breaking up their soils that have never been broken up before that are getting into agriculture with a heavy investment are not going to back out of it when the dollar comes down because they're going to have political problems just like there are in America with respect to wiping out an industry. The net

result is if they straighten out that deficit soon enough and get us onto a fiscally responsible course that dollar will come down interest rates will come down and a vast majority this problem will go away because we are the most cost effective producer in the world. A 1 percent drop in interest rates in America. Means one and a half billion dollars to American farmers one and a half billion per percent in my state there is 5 billion dollars worth of debt not five percentage points off of that. And look at two hundred fifty million dollars where the new money just like an airplane flying over South Dakota dropping about us. That's big bucks where I come from 250 million bucks. I don't like to turn to the panel and sell your farm bill the president I want to buy it if I want to sell fresh land prices. Any buyers out there see me after the program. Weldon Barton let's start with you. Jim I'd like to ask a question I suppose primarily Governor John Khloe and Governor Branstad glow in your comments. I suppose your basic case was that the federal government through assorted

ways got us into a lot of this problem and now the federal government I suppose by implication should be doing more to get us out of it. Governor Branstad talked in terms of the auto industry and there that agriculture ought to be able to turn around the way the auto industry did course in the case of the auto industry. We had a very large loan guarantee loan guarantees from the federal government three times the size of the loan guarantees that have been extended to the agricultural community during the last year. We had four years of import controls on agricultural and auto products coming from Japan and other countries. We had a very very favorable tax federal tax policy and with ability to trade tax subsidies between firms assisting the auto industry. And without that kind of across the board heavy responsibility without a government I suppose you could make a case that the auto industry

would not have turned around. Now my question is this. I think there's a great deal of emphasis now coming from the federal government at least in some parts of the government to shift the responsibility or try to shift the responsibility now given all of this over to the states saying you know you've got to do more in the states that once you see that not more is going to be done by the federal government then the states perhaps will be prepared to step in now. I guess I for one do not believe that in the final analysis the resources you don't have jurisdiction over the major problem areas that have caused problems in agriculture. Question What do you do. What are you doing to try to keep from being lashed if you will at this point of emphasis shifting to the states from the federal government to take the weight off. Federal government facing up to what it needs to do in this situation. If you're talking to me first That's one of the reasons I'm here today. I mean I travel around I

decided I'm not going to be a preacher going to the normal Sunday church anymore I'm going out as a missionary and I'm going to go elsewhere and I'm going to try to tell the story when I grew up and maybe my household was different than other people's but I had to clean up the mess in the room that I created nobody had to clean it up for me and by God the federal government created this mess. They've done it with an aptitude they've done it with lack of guts and they've thought of pursuing policies that got them votes on Election Day that didn't do anything for the substance of building the economic fabric of rural America. And they are the only ones who can straighten out my state South Dakota cannot compete with the treasury of France. I'd like to think we can but we can't. I can't compete with the government of Argentina Brazil as I said in my speech. But I can't compete with French farmers and I can't compete with Brazilian and Argentinian farmers. Our United States Constitution leaves those responsibilities to the federal government. But we've done some things I mean so it was two of the three of us here have done something with respect to the importation of hogs. Thank God for the federal FDA health was at a crucial juncture when we needed him because had I stopped the Canadian hogs from coming into South Dakota

for economic reasons that would have been in violation of the Interstate Commerce Clause of the U.S. Constitution it would've violated federal treaties. But the police powers of a governor for health and safety reasons are rather awesome. And so I found it awesome. I found an awesome tool to use this raise the price of beef pork at least in my state about $4 a hundred weight. And Terry says for $5 a hundred way down here in Florida or a come from us if we brought in if we brought in which your body armor and I'm asking that Rob that's not asked. But I mean I'll just cut it off there to say that I we can't afford to do it. It's our responsibility to do things in the economic development area to educate our children to deal with the basic what I call the necessities of life transportation medical care education food and housing that I think is a state responsibility and we look forward to meeting that challenge or suffer the consequences for its failure. These other things competing with foreign nations fighting with foreign governments and passing national policies affect all the United States have to be exclusively a federal responsibility.

You want me to answer too. I think Governor Janklow done a good job of pointing out the federal government has a responsibility. Frankly I feel they're trying to push it off onto the states and I believe that it's our responsibility not to let them do that. I've been to Washington half a dozen times this year. We've done everything we can to try to keep the pressure on there and I think this conference is an opportunity for for you and for all of us to focus attention on this issue and make people aware of the fact that it is a national problem that has to be dealt with. There are things the states can do but we can't solve the problem by ourselves. We've taken the initiative in conservation. We've taken the initiative in dealing with the with the crisis by providing hotlines and encouraging the use of the job training partnership program to help displaced farmers. And there are things we can do. And we've taken action individually to do that. And as an association

we've taken action to try to encourage changes in national policy. I continue to believe that the federal government should do for the farmers what they did for Chrysler and the auto industry. They saw a problem in that industry and they realistically work to try to make it more competitive. And the auto industry itself made adjustments and changes to be more competitive both labor and management and as a result the auto industry is coming back. They still have problems but the same thing needs to be done in agriculture. And frankly I was very upset at the national administration of my party for refusing to provide loan guarantees to help guarantee some of these loans and help stabilize the situation and I got I continue to believe that makes sense. Failing to do so is causing more and more banks to go under the farm credit system is in jeopardy as a result of it. And frankly it's being penny wise and pound foolish by not taking action at the national level. This is traditional for the national government.

They want to do something about a 55 mile an hour speed limit so they shop for the stuff they want to set up billboards they shoved off other states they've prohibited the States for decades from dealing with low level waste. Now they they want to deal with the problem so they shove it off on the stage. They want to do some laws they shoved off in the States they want to do some a DWI they shovel off on the states all the while passing a national policy and then shoving it off on the stage. So this isn't new it just happens to be the biggest bomb they've ever dropped it's not the only one they're going to drive. Carl you have anything on. I think yes to some of that I don't have it easy out OK. That time he chose not in the interests of moving along I would urge the panelists to be as brief in your question as possible and be if at all possible directed to one of the governors and will try to move Israel along. Chuck if I knew you were going to do that I think I turned sorry. Feel free to do whatever you want to do now is. Just a suggestion. That's is that's really freedom of the press or you would want to read that I want to

quickly move to what Jim suggested and get right at my question I do want to try to attempt to frame this question Jim for governor Cohen if I might like to a couple of observations about what I'm hearing here from Governor Janklow and Governor Branstad. It seems what I'm hearing and I don't know about the rest of the audience here but what I'm hearing is. That there is a great resistance now what is occurring in Washington D.C. about placing. All of this new federalism. Upon the various state governments. My sense of what we went through last fall in 1900 was do precisely that and that was to get the federal government off of our backs. And now I guess what I'm hearing quite frankly is there were not really serious about getting government quite off our backs that far. Governor Karl and I had what do you have because you're chairman of the national

governors governors association. I sense here today there's not necessarily unanimity on any 1085 farm program. I guess looking at your congressional delegation South Dakota delegation I was delegation just terms of the three governors present. We're now if we could convince those delegations. We now still need 200 other congressmen to pass a 1085 farm program. Governor what can we do. This is a problem that cuts just against agriculture it's not just workers it John Deere and water level. It's it's as Governor Branstad said in his remarks we're talking about the whole community. What can I read to get at this what can we reasonably expect what can the governors association do to begin to move not only agricultural states. But also urban Eleanora has what twenty four congressional seats. Nearly a dozen of those in within Cook County what can we do. What can I

would do South Dakota Kansas do. To help carry this message this urgent message. To America. You people have a spoke to that about the need to do it but substantively I haven't heard that. Can you could you help me if nobody else in terms because I'm concerned about the once in a while we speak with some degree of substance but rarely I must admit. First of all I remind you that the Kansas does have Senator Dole So we will share a little greater than the usual. That would come from the small delegation that we have. I don't say that a political sense to put a great deal of pressure on him but we're fortunate to have some powerful leadership from the Midwest and hopefully they can get something done for us. I would also add terms of your comment. You said we were talking both ways in terms of federalism in the shift and so forth that made reference to last fall.

It really does go both ways. So we're willing to accept that.