State of the Farm Economy: Chairman Frank D. Lucas

Opening Statement of Chairman Frank D. Lucas Committee on Agriculture Public hearing to review the state of the farm economy February 17, 2011 "With all the bad news out there today, it is nice to have something good to report: the state of the U.S. farm economy is strong. Our nation's producers are generally experiencing good prices and solid production. USDA is forecasting record high income and exports. "Importantly, despite the higher farm gate prices, last year's rate of inflation for food costs that consumers pay at the grocery store was the lowest on record since 1962, and it is expected to track with the average rate of inflation this year. "Yet, despite the good news, those of us who have been around agriculture know all too well that things can turn quickly. The agriculture economy is highly cyclical and it changes like the weather in western Oklahoma: fast, sharp, and without notice. This reality helps explain why the mood in farm country today is both upbeat and apprehensive. After all, increasing production costs, lost equity, and fast rising farm debt may be manageable for producers with strong prices and production -- but they spell big trouble without. "These facts, along with experience, offer a cautionary note to anyone who might be tempted to cite current economic conditions on the farm as the predicate for setting long term farm policies. "Some outside this room may even ask: why should anyone other than those directly involved in agriculture care about the state of the farm economy? I offer three reasons: First, as the Federal Reserve puts it, thanks to production agriculture, "rural America is leading the U.S. economic recovery," just as it did through the last recession. "Second, food security remains important to national security. In fact, NPR made this point in a recent story entitled, "Rising Food Prices Can Topple Governments, Too". "And, third, there will be 9 billion people on this planet by the year 2050 and we will need to double production, using less water and land, in order to feed them all. These facts are a wake-up call to anyone who believes that agriculture no longer matters to our economy. But there is another eye-opener. "Some of you may have seen the black bumper stickers with a thin blue line across them, with that thin blue line representing our police force. Well, today, there are just 210,000 Americans out there who are responsible for 80 percent of U.S. agricultural production. These Americans support our economy, help keep us secure, and in these 210,000 people lies the answer to the question of how we are going to feed 9 billion people come the year 2050. In short, these American men and women form a very thin line that we had better hold. "So, the question becomes, are the federal policies that we are pursuing today going to hold or break this line? Unfortunately, on a range of issues, new policies coming out of Washington are threatening to punch a hole clear through it. We know that EPA has opened up at least ten assaults on agriculture, including the strange objectives of eliminating dust on farms and treating milk on farms as if it was oil. To put it plainly, EPA is gambling with our economy and wasting taxpayer dollars while it's at it. "Irrational environmental policy is also jeopardizing our energy production capacity that, even without the regulation of greenhouse gases, is fast approaching a crisis. And, by imposing margin requirements on end users under last year's financial regulatory reform, Washington has actually managed to add fuel to the fire. "I also feel a very subtle push from the Department that seems to take for granted these 210,000 Americans that are producing 80 percent of our food. There seems to be a prioritization on a small subsection of producers in order to satisfy certain constituencies. "I think all of the members of this Committee support marketing opportunities such as organic production, farmers markets, and local production but organic production and these other seeming priorities of the Department will not feed the nine billion souls that will inhabit the planet. http://agriculture.house.gov