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I answered that they should not be eliminated. I think I may have misunderstood what he was asking, and I wanted to talk about

this.

I was approaching it from the context, as an apple grower, when China started dumping apple concentrate in the United States markets, our price for processed apples went from $80 a ton to $10 a ton and it cost $20 a ton just to pick them. And so a 91 percent tariff was slapped on China for anti-dumping and that's what I was referring to; that's when I answered the question saying, "yes, I'm in favor of unilateral trade sanctions." I don't want them eliminated for purposes like that. And that's where I was coming from. And I would like to see permanent normal trade relations established with China but, certainly, there's got to be these issues addressed such as dumping and there's a whole slew of other issues. But I am in favor of that.

Mr. SIMPSON. Anyone else?

Mr. GIOVANETTI. Mr. Simpson, it doesn't matter whether it's NAFTA or GATT or any other pact or negotiation that we enter into, we definitely have the potential to be damaged by any of these if our trade negotiation policy doesn't change. We need to go in there with a plan. Obviously, you gentlemen are collecting the information that it takes to go in with the right kind of plan but we need to get tougher on all of these issues that have been discussed here today.

There is no reason for us to enter negotiations with the attitude that we need to compromise our place at the table. We go into these things with a compromise attitude and we end up going from the middle in the other direction, rather from our position to the middle.

Examples are avocados, asparagus, and tomatoes, all that have been damaged by some of our trade agreements.

So I think we need an attitude adjustment to begin with and go into these negotiations and enter them from a bargaining position of a much higher level than we have in the past.

Mr. SIMPSON. I appreciate that and, as Mr. Moran suggested, I think we have to have agreements if we're going to trade. But those agreements, as you've mentioned, have to be fair and that means we have to have a tougher negotiating position. And I suggested at the WTO that we hire the European negotiators because they seem to do a better than ours have done in the past.

But we want to make sure and I think this committee has tried to make sure that, when we negotiate these agreements, as an example, on export subsidies, that we didn't go in with percentage reductions as we've done in the past and say, "We're going to have a 10 percent reduction in export subsidies" between the Europeans and us because, when they go from 50 to 45 and we go from 10 to nine, we're still left with a huge disadvantage. And I think those are some of the things and the reason an agreement was not reached in Seattle.

But, to me, I don't think Seattle was a failure; I actually think Seattle was a step in establishing us and putting down the marker by which we were going to negotiate. To me, as I tell the individuals in my area, I just look at that as, we thought it was going to take a day to paint our house and it's going to take a couple days,

or maybe three or four. We continue negotiating and continue meeting with these people and, hopefully, we will be able to reach some agreement on what is fair and negotiate from that perspective rather than just reaching an agreement for having the sake of reaching an agreement.

I appreciate your testimony and it is important that we get around because, regardless of where we come from, the concerns and issues are different in every area of this country and I'm interested to learn about the glassy- winged sharpshooter; it sounds like a fighting combat unit from Vietnam. I didn't know a lot about that but I'm going to learn a lot more about it, I'm sure, from Mr. Ose relatively soon.

Mr. MERRILL. The other aspect when you're dealing with trade agreements is also talk talking about the sharpshooter, is pest exclusion.

When we were back in Washington and met with USDA and officials, one of their concerns was not to pick on one country, but Argentina was one that was getting ready to export, as I recall, citrus to the United States. And one of the fellows at USDA characterized our country as the Jurassic Park of exotic diseases ready to come here.

And we said, "Why would we have to worry about that right now when we're having all this trouble with pest exclusion?" He said, "Well, it seems that they've sent some troops to Kosovo and now we have to thank them and that means we've got to bring the citrus in." and I don't know if that's literally the case, but I do think it points up the fact that when there's a lot more than just who gets to sell what, where. We get hitchhikers such as pests come in here at the very time we don't have enough money to fund APHIS where we should. We make the job even tougher by allowing pests to come in and attack our number one industry in this country. And I think we have to think about it.

One last thing. We also heard that it was mentioned by one of the speakers that we're contemplating moving to a systems approach of determining pest exclusion risk, which means, I guess, you sit down and mathematically figure out with some real smart people what the chances are of the bug coming in without actually having much experience with it. And then we just all see how it comes out when we're all done as to whether we were right or not. And I would say that we need to stick with good science and good exclusion techniques and let the experts in pest exclusion do the job that they can do if they have enough funding and enough staffing and not get carried away with too much, virtual solutions that we think might work and then we find we have a lot more than just the sharpshooter, lots of new words to learn to pronounce along the way. And big threats that, frankly, there's no answer to. The CHAIRMAN. Mr. Stenholm has a follow-up question.

Mr. STENHOLM. Mr. Colombini, I thank you for your clarification because I do believe that you did misunderstand what I was asking. And I certainly agree you're talking about reciprocity and that's what all of you have said. If we treat countries a certain way, we expect to be treated the same way. If not, then we have every ample reason to do what the chairman was asking you to seriously think about.

We can't just always be the good guy in trade; you've got to deal as I'll put it differently, I think our Government has to stand shoulder to shoulder with our producers in that marketplace. Otherwise, we're going to continue to lose. And what we're looking for is better ways for us to stand shoulder to shoulder. And that's when we have unilaterally imposed sanctions.

When we say we don't like country eggs but all our "friends" continue to sell to them, who does it hurt? The producers in America and the people in the other country.

That was the gist of it and thank you for clarifying your answer. The CHAIRMAN. Thank you, panel, very much.

The reason I get paid so much more than all of my colleagues is I have to be the bad guy.

We are way over time on the first panel. I would ask all of our witnesses to hold their comments within 5 minutes. I know you don't think we're going to read this testimony. You will be pleasantly surprised that every word of the testimony is being read.

I will also ask my colleagues if they would please help to move the questioning along. We don't, unfortunately, have the luxury of being able to spend the afternoon in beautiful California, we have to fly to beautiful South Dakota for a hearing there. And so we are well beyond where we should be after the first panel.

Thank you very much for your time.

I will call the second panel to the witness table now: Mr. Thomas Ellis, rice, wheat, and alfalfa producer from Grimes, CA; Mr. Daniel and I'm going to really mess this one up but, if you know who you are, please come forward Errotabere, cotton, wheat, garlic, tomato producer from Riverdale, CA; Mr. Bruce Heiden, a cotton producer from Buckeye, AZ; Mr. Wally Murphy, a barley, cotton, and wheat producer from Tucson, AZ; and Mr. Steve Rystrom, a rice producer from Chico, CA.

And if you would all please sit; we're going backwards this time from where we did before, but that keeps us all alert.

Mr. Ellis, we could start with you and please proceed. And, if you would, watch the green and red lights.

Thank you.

STATEMENT OF THOMAS W. ELLIS, RICE, WHEAT, AND
ALFALFA PRODUCER, GRIMES, CA

MR. ELLIS. Thank you, Mr. Chairman.

I'm Tom Ellis and I farm about 1,000 acres in southern Colusa County and northern Yolo County on the west side of the Sacramento River; it's about a 30-minute drive north of this hearing

room.

I'm very pleased to have this opportunity to talk with you and sincerely appreciate your committee coming to Woodland today. I also want to emphasize that I am speaking only for myself as an individual farmer. And, since everybody else has touted their Assemblyman or their Congressman a little bit, I have to talk about Doug Ose.

Doug, I want your colleagues to know that you make a real effort to understand what we need in agriculture; and I appreciate that and I admire your enthusiasm, your energy, and your dedication.

On my operation, I grow wheat, rice, and alfalfa. Since alfalfa is my main crop on 700 acres of my farm, my comments today will be addressed towards issues affecting that crop. In addition to my acreage, I handle alfalfa for some of my neighbors and, combined, we normally produce about 8,000 tons of alfalfa cubes and some baled hay each year.

About 60 percent of our cube production was sold to Japan, a market we enjoyed for over 20 years, until 1998, when sales dropped from 5,000 ton a year to 900 tons due to the drastic economic problems experienced in that country. That hurt, as you can well imagine.

In 1999, we hope for some recovery but shipped tonnage was about the same as 1998 as we experienced continued downward pressure on price and volume.

Japanese buyers were very price-conscious and looked north to Canadian producers who seemed willing to sell for less. Part of the reason, I suspect, is the Canadian transportation subsidy which helps offset the cost of shipping alfalfa and grain products to western Canadian ports. The result is a significant price advantage for Canadian producers.

I realize Midwest interests don't want Canadian grain delivered into the middle of the United States, so they see the transportation subsidy as a benefit. But how about alfalfa and forage products? Could we ask the Canadian Government to end the transportation subsidy to these products?

I have found out, since I have prepared this testimony, that this subsidy to hay products was supposed to be eliminated in 1996 during the round of negotiations. However, I suspect these are still in effect in some form or another. In the past, it has amounted to about $20 per ton making it impossible for western U.S. hay producers to compete. Therefore, I respectfully request our Government to look into this situation.

Another area of real concern to me is risk management. I am in full support of H.R. 957, the Farm and Ranch Risk Management Act of 1999 which would create FARRM accounts. Current crop insurance and recent disaster payment programs have not been very successful in addressing the needs of hay and forage producers. I think the idea of pre-tax savings accounts, which is my understanding of how H.R. 957 works, represents sound fiscal policy, it is easy to understand, it would be easy to administer, it would be fair to all producers, and would encourage savings while providing farmers with added income stability.

I talked with my lender about the idea and I used the Farm Credit System and he was very supportive of the program. I think lenders would welcome the measure as an additional tool available to farmers to help them through tough years. And, best of all, the savings account is under the control of growers themselves.

I feel such a program would lessen the need for disaster assistance which is difficult to pass, difficult to implement, never entirely fair, and seems that someone is always left out. The latter category is where hay and forage producers usually find themselves.

This is a slight deviation from what I presented. At the request of the California Association of Wheat Growers who were unable to get a spot on the agenda today, I am conveying the message that

they are submitting written testimony regarding a Market Access issue with Mexico. It involves Mexico's refusal to take any wheat from California because of karnel bunt, even though only a small area of our State is regulated for the karnel bunt disease. So that testimony will be forwarded to you.

Your consideration of these ideas would be appreciated and I sincerely thank you for coming to Woodland today. If you haven't toured this museum, be sure to do so and make sure you see the Harris Harvester display. These machines were the backbone of the Central Valley grain industry from the mid-teens to the forties and the fifties. It's the big machine on the south end of the display and I compliment the Heidricks for doing that.

And, Doug, I'm going to have a quiz for you on that machine when I see you next.

And thank you very much for your coming to Woodland today. [The prepared statement of Mr. Ellis appears at the conclusion of the hearing.]

STATEMENT OF DANIEL ERROTABERE, COTTON, WHEAT, GARLIC, AND TOMATO PRODUCER, RIVERDALE, CA

Mr. ERROTABERE. Good morning, Mr. Chairman, and members of the House Agriculture Committee.

My name is Dan Errotabere and I'd like to thank you, Mr. Chairman and the members of the committee, for having this hearing and I appreciate the opportunity to participate.

My family has been involved in farming in the San Joaquin Valley of California since the late forties. Today, my farming operation with my two brothers includes growing upland and pima cottons; wheat; processing garlic, cannery tomatoes, lettuce, and almonds. Among my many activities and involvement in the industry, I'm currently the first vice chairman of the California Cotton Growers Association whose membership today represents over 99 percent of California's total cotton production.

I, like most cotton farmers in California, have suffered from the recent depressed economic conditions, not only in the cotton industry, but in most all of agriculture. The general consensus among those that I consult with today don't see a substantial turnaround in the immediate future which means that, in all likelihood, the Federal Government will once again be called upon to provide special assistance to help farms to continue, not only to compete, but to survive.

The current farm bill was structured with good intentions, but it did not and could not predict the unusual set of circumstances in this country as well as in the world that caused such a collapse throughout most agriculture. Many blamed the current farm bill, but I don't. For the most part, I support most of the farm bill's provisions such as, the planting flexibility, the marketing loan provisions, and cotton's three-step competitiveness provisions. But, after our 1999 experience, I think we can all agree that the current farm bill falls woefully short in providing adequate downside price protection.

The culmination of this farm bill's marketing system loan levels and the fixed-rate provisions establishes a safety net well below the cost of production. Even though I would support the current farm

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